After Bitcoin plunged 20%, confidence in a rebound remains

Since March, the market performance of Bitcoin has been up and down. As one of the most popular cryptocurrencies in the world, the price of Bitcoin has plummeted by more than 20% in just a few months, and this change has undoubtedly made investors uneasy. However, despite such severe market challenges, analysts at Bloomberg are optimistic about the future of Bitcoin and believe that there is still a chance for a rebound. This view has sparked widespread discussion, and many investors are also wondering: In such a turbulent market environment, can Bitcoin really rebound?

Bitcoin's price fluctuations are not accidental, but are affected by a variety of factors. First, changes in market sentiment directly affect investors' decisions. As the price of Bitcoin plummeted, many investors chose to sell, further exacerbating the price drop. This is called "panic selling" and is common in financial markets. Just like when the stock market crashes, investors often choose to get out quickly because of fear, which in turn leads to a larger price drop.

However, it is worth noting that market sentiment is not the only determining factor. The supply and demand of Bitcoin is also constantly changing. As more and more institutional investors enter the market, the demand for Bitcoin has been supported to some extent. For example, some large companies have recently begun to use Bitcoin as part of their asset allocation, which undoubtedly provides support for the price of Bitcoin. Even in the case of a sharp drop, there are still some investors who buy at low levels, expecting a rebound in the future.

At the same time, many analysts have also begun to pay attention to the technical side of Bitcoin. Technical analysis is a method of predicting future price trends through historical price data. In this process, many technical indicators are used to help traders determine the market's buy and sell signals. For example, technical indicators such as moving averages and relative strength indexes play an important role in analyzing Bitcoin prices. Despite the current low market sentiment, technical analysis shows that Bitcoin is hovering around certain key support levels, which provides a basis for the possibility of a rebound.

In addition, changes in the global economic environment are also affecting the price of Bitcoin. In recent years, the monetary policies of central banks have continued to be loose, leading to rising inflation risks. In this context, many investors see Bitcoin as a tool to hedge against inflation. The total amount of Bitcoin is limited, which makes it have the attributes of "digital gold" to some extent. Therefore, despite the sharp price fluctuations in the short term, in the long run, the value of Bitcoin is still optimistic by many people.

Of course, the confidence of the rebound is not without risks. Market uncertainty still exists, and factors such as regulatory policies and technical security may affect the price of Bitcoin. In particular, some countries have recently strengthened their supervision of cryptocurrencies, which has undoubtedly brought pressure to the market. Investors must remain rational when facing market fluctuations to avoid greater losses due to emotional decisions.

In such a complex market environment, investors should adopt a more diversified investment strategy. An investment method that relies solely on Bitcoin may face greater risks. On the contrary, by diversifying investments, investors can reduce the volatility of the overall portfolio to a certain extent. For example, in addition to Bitcoin, investors can also consider other cryptocurrencies, traditional stocks, bonds and other asset classes. In this way, even if the price of Bitcoin continues to fall, the performance of other assets may provide investors with some protection.

From a personal perspective, I think the rebound of Bitcoin is not only a recovery in price, but also a rebuilding of market confidence. Investors need to be sensitive to the market and adjust their investment strategies in a timely manner. At the same time, in-depth analysis of market dynamics and attention to industry trends can help find opportunities in a volatile market. In future investments, I will pay more attention to the collection and analysis of market information and strive to be well-informed.

In general, although Bitcoin has experienced a plunge of more than 20% since March, the market's confidence in rebounding still exists. Various factors are intertwined, making the future of Bitcoin full of uncertainty. However, no matter how the market changes, investors should remain calm, look at market fluctuations rationally, and seize potential investment opportunities. In this ever-changing cryptocurrency market, only by maintaining keen insight and flexible response strategies can we remain invincible in the ever-changing situation.

The four most famous international exchanges:

Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

Coin Circle (120BTc.coM): After Bitcoin surged to an all-time high of nearly $74,000 in March this year, it performed poorly in April, with a monthly drop of 16%, the worst monthly drop since FTX’s collapse in November 2022, and then fell 4% in the first two days of May, falling below $57,000, setting a new low since the end of February.
TROUBLE COMING FOR GLOBAL FINANCIAL MARKETS?
According to Bloomberg, the plunge in Bitcoin has aroused concern among investors. They believe that the significant volatility in the cryptocurrency market may foreshadow broader changes in risk appetite in global markets. Some investors are looking for clues in the turning point of Bitcoin's trend that may affect changes in the liquidity of other assets.
The recent decline in Bitcoin is mainly affected by the Federal Reserve. The prospect of higher and longer interest rates has brought heavy pressure to the currency market. Over the past few weeks, the Federal Reserve has repeatedly hinted that interest rates will remain at the same level for a longer period of time and the schedule for rate cuts has been postponed. This has pushed up U.S. Treasury yields, strengthened the dollar, and tightened the financial environment.
Charlie, Chief Investment Officer of ByteTree Asset Management
“Bitcoin is our favorite checkpoint indicator, a warning of future trouble in financial markets, but we believe it will rebound at some point,” Morris wrote in a report.
The report pointed out that Bitcoin was able to hit a record high in March this year, mainly benefiting from the inflow of funds after Bitcoin spot ETFs such as BlackRock were approved for listing, but the market demand for these products gradually weakened afterwards, and the market also failed to benefit from the launch of Bitcoin and Ethereum spot ETFs in Hong Kong this week.
SoSoValue data shows that the Bitcoin spot ETF listed in the United States had a total net outflow of US$564 million on the 1st, setting a record for the largest single-day net outflow. BlackRock's IBIT also saw its first outflow of funds since its listing, with a single-day net outflow of US$36.93 million.
MACROECONOMIC CONDITIONS WILL CONTINUE TO INFLUENCE TRENDS
Bitcoin has fallen in April in four of the past 10 years. After falling in April in three of the past 10 years, it fell an average of 18% in May of that year. However, Bloomberg believes that if inflation pressure eases and the market re-bets that the Federal Reserve will take a more relaxed stance, cryptocurrencies and other speculative investments may get some respite.
Against the backdrop of stagnant progress in combating inflation and continued hot economy in the United States, the Federal Reserve decided this morning to keep the federal funds rate at 5.25-5.5%, keeping the interest rate unchanged for the sixth consecutive time. Federal Reserve Chairman Jerome Powell
Powell, in a post-meeting news conference, left open the possibility of a rate cut this year, but he also acknowledged that rising inflation had undermined his confidence that price pressures were receding.
Youwei, Chief Economist and Vice President of BIT Mining Ltd., a cryptocurrency mining company
Yang said the next three to four months will be less bullish and more risk-oriented, with markets keeping a close eye on inflation, employment and economic data for any unexpected shocks or to regain confidence after a possible rate cut.