Supply chain issues in China have already stirred the market this year. Even at the end of this year, the news of major protests against COVID restrictions in China continues the bearish outlook for crypto markets. Once again, a new wave of selling pressure is dominating, and the BTC price is not an exception. After a volatile last week, the negative momentum continues on Monday.
After the growing unrest in the eastern region, investors want to find a haven instead of relying heavily on Bitcoin. They find more value in government bonds and debt funds instead of observing the value of their hard-earned money decreasing in the crypto market.
Bitcoin price observed a sudden sell-off on November 28 due to the protest in China. It proves that BTC is still a risky asset for the long term, and many retail investors will sell their holdings if BTC breaks the long-term support of $16K.
In this uncertain time, many crypto enthusiasts doubt the potentiality of Bitcoin because it runs on a proof of work consensus, which is energy intensive and difficult to mine. That is why it may not replace gold in the long term, but there is also an optimistic point of view. BTC is difficult to mine and has a limited supply, which makes Bitcoin scarcer. Based on the demand and supply, the BTC price will surge as soon as the crypto market stabilizes after a few months. It could be an ideal time to accumulate BTC for the long term.
Experts think due to the high correlation between BTC and stock markets, BTC is considered a riskier asset. Bitcoin price will be more volatile than stocks. However, some good news helps to hold the support of $16k during this sudden sell-off.
El Salvador’s National Assembly is progressing towards regulating digital securities in the country, and they will issue Bitcoin-backed bonds for the investors, which will be more secure and safe.
Lastly, many investors are worried about the FTX news. Experts think the company executives will be held responsible for this liquidity crisis in the crypto exchange.
On the other hand, the largest crypto exchange Binance has launched a new website to explain the proof of the reserve system, and they will start by opening a Bitcoin reserve with a 101% reserve ratio.