Cryptocurrency seems to be struggling at the moment and investors are worried.
After what seemed like a golden year for crypto, the price of coins and tokens seems to be slowly dropping at the moment.
According to Coinbase, the market is currency down 11 per cent in the last 24 hours with a general trend of cryptocurrency prices dropping in the past week.
READ MORE: WHAT IS ROCKET BUNNY CRYPTO?
Bitcoin has dropped by 25 per cent in the past week and Ethereum has dropped by 30 per cent in the past week but the question is why is it happening?
And for those who have invested, will it ever recover? Well, here’s everything that we have so far about the massive price crash and whether or not you should sell or hold onto your crypto.
Why are price dipping and will it recover?
Cryptocurrency has been suffering due to China cracking down on them.
China has been seen as one of the main powerhouses when it comes to cryptocurrency mining and trading. China accounted for around 65 per cent of global Bitcoin production last year, with Sichuan rating as its second largest producer, according to research by the University of Cambridge.
However, the country has seen a major crackdown on the currency and has recently told banks to stop accepting them.
On top of that, a month ago the ruling party said that it did not recognise cryptocurrency as a form of currency.
The People’s Bank of China (PBOC) said it had recently summoned several major banks and payments companies to call on them to take tougher action over the trading of cryptocurrencies.
The latest measure came after authorities in the southwest province of Sichuan on Friday ordered Bitcoin mining operations to close down.
Analysts worry that Bitcoin is forming a “death cross” meaning its average price over the last 50 days fell below that of its 200-day moving average. The indicator is typically seen as a closely-watched technical measure that could offer a hint at more pain to come.
Alexander Vasiliev, co-founder of global payment network Mercuryo, said in an article in the Independent : “At this rate of fall, Bitcoin is likely to see support at $40,000 [£28316.20] if the selling continues, and surviving this fundamental onslaught can set a new run that will create a new all-time high of $70,000 [£49,553.35] in the mid-to-long term.”
Yet this view is not shared by Kevin Brown, a savings and investment specialist at Scottish Friendly, who warned against investing for anyone who doesn’t understand the market.
“The level of volatility means that savers who choose to invest in cryptocurrencies must be prepared to lose all their money,” he said.
“At least when you are at the bookies you have a real chance of understanding the outcome and probabilities if you know the horses or football.”
