Bitcoin drops below $40,000 again. Is now a good time to buy?

Bitcoin’s price has recently dropped again, following a two-day rebound to $42,000. So far, the price of bitcoin has fallen below $40,000, representing a drop of more than 40% from last year’s high of more than $63,000 on April 12, $68,990.90 on November 10. Bitcoin’s sudden crash on January 10 caused the price to trade below $40,000 for the first time in 110 days.

Every day, we receive many questions from users in the BigONE community, many of whom are investors wondering if it is a good time to buy when Bitcoin falls below $40,000 again. Before answering this question, BigONE believes that everyone should learn as much as they can about Bitcoin’s current status and future potential to understand its investment status properly. They should not believe in the hyped news from any financial institution or media outlet claiming to provide a deeper understanding of Bitcoin’s current market. To make well-informed investment decisions you should do your own research, or ‘DYOR’ to use the crypto community slang. Similarly, the information in this article is only for reference purposes and does not constitute formal investment advice.

Credit: CoinMarketCap; showing the volatile price of Bitcoin since April 2021

The current financial system vs Bitcoin

The entire concept of cryptocurrencies stems from the idea that traditional financial institutions can no longer maintain a stable monetary system, that people have lost faith in the current financial system, and that a new approach to change the status quo is urgently needed. Current global dynamics play a crucial role in the rise and fall of cryptocurrency prices. With the recent series of actions of governments around the world focusing on cryptocurrency investments, such as China banning crypto, there is a growing sense of a lack of personal control in the current financial system. That said the recent moves by the US Government to clarify its position on crypto is likely to have a positive impact on price in the longer term. As the Biden’s executive order was announced, the language was broadly upbeat for the crypto industry: “The rise in digital assets creates an opportunity to reinforce American leadership in the global financial system and at the technological frontier, but also has substantial implications for consumer protection, financial stability, national security, and climate risk.”

Awareness has improved significantly

Ukraine has long been one of the countries with high cryptocurrency usage, and as its war with Russia escalates, its usage of cryptocurrencies is likely to increase further. On the other hand, due to the further intensification of sanctions against Russia by Western countries, it maybe that Russians convert their assets into crypto to maintain the value of their assets and to allow them to conduct transactions with the outside world.

As global markets fluctuate amid a series of ongoing crises, the prices of cryptocurrencies are likely to fluctuate as well. So, when you’re evaluating whether you should buy the dip in the price of Bitcoin, it’s important to keep in mind that the current global market is going through a very volatile period. As a result, cryptocurrencies as a whole can see sharp, rapid ups and down movements in price led by Bitcoin.

Stay alert for upcoming events

With both the Fed’s rate hike plans and the expiring Bitcoin quarterly futures contract likely to have a significant impact on Bitcoin’s price, the Fed’s next meeting will be in mid-March alongside the expiration of Bitcoin’s quarterly futures contract in late April. Therefore, investors need to pay close attention to these two crucial time points that may affect the price of Bitcoin.

And because of the Fed’s recalibration, global demand for dollars will likely increase, so the prices of alternative assets such as bitcoin may also fall. Also, with the expiry of Bitcoin’s quarterly futures contracts, it is not yet known whether more people will be willing to buy or sell Bitcoin on the terms. But regardless of the outcome, with increased activity, Bitcoin’s price is likely to swing as sharply as it has in the past on futures contract expirations.

Rethink your investment strategy

Bitcoin’s current price is well below its all-time high of $68,000, and if you’re a long-term cryptocurrency holder, even if you buy now, you still have an opportunity to make profitable investments.

The cryptocurrency space, led by Bitcoin, is a relatively new investment method that needs to be widely accepted and adopted by the mainstream. So even if you buy now at what looks like a high price, it has the potential to be a low price for years to come.

The global situation is very volatile right now, and so is Bitcoin. Extreme dips and spikes are to be expected, but if you believe in Bitcoin’s long-term value, be patient and wait for it to ride out the volatility in the longer term. If you are interested in buying Bitcoin at the current price but don’t know where to buy it, log on to the BigONE Exchange.

Get the latest market news and insights with our Crypto Daily News Daily Recap on YouTube, with co-hosts Vibin and the Crypto Beast. Plus, in-depth coverage from crypto experts in our series of AMA videos, hosted by Stuart Hall.

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