What Causes Bitcoin’s Surges and Crashes – 2024 Guide

Are you into cryptos? How about Bitcoin in particular? They’ve been a highly-talked-about topic for some time now and it seems as if they will stay with us in 2024. When it comes to digital currencies, it is vital for you to keep informing yourself of all changes within the market since cryptos are volatile. Read a blog, listen to a podcast, and watch out for market changes, crashes, or drops! In fact, did you know that the Bitcoin price has slumped to $43,030 from the high of over $47,700 on the 1st of January 2024?! Why did this drop happen and what you can expect in 2024 is written down below!

Why are these drops constantly happening?

Drops in currencies will always vary and depend on several different factors that are going on in the world and that are making a slight impact on the stock market as well. At the moment this change has happened because of the spread of the Omicron variant that has made an impact on every aspect and field in our lives (travel, health, money, political gatherings, protests, etc). Most investors will view this as an opportunity to get out of the trade due to inconvenient and unpredictable surroundings.

In 2024, almost every top crypto token returned a lot of great and impressive profits for big and small players, but this is not as likely to happen in 2024.

Top 6 reasons why crashes might also happen in 2024

Source: forbes.com

1. History repeats itself

The future might not look so good and as bright for cryptos. This is because since March 2024 the total value of all digital currencies has jumped more than 14-fold to $2.14 trillion (how more do you think that it can go?) In the past couple of years, no currency has made such a massive jump, and it will be hard to beat that score. History will probably repeat itself where BTC will have a crash.

2. Outpacing

Technology is always moving, developing, and reaching new milestones. However, it can be impossible to tell so much ahead and in advance on what will happen. Most scientists can’t estimate how quickly a new technology or service will be adopted. Businesses are unlikely to jump at the chance to support large-scale projects until there’s evidence of its real-world effectiveness. The same applies to BTC trading.

3. Margin debt wreaks havoc

Source: coincu.com

Are you familiar with margin debt wreaks havoc? Margin describes the number of money investors are borrowing with interest to purchase or short-sell securities. This is why you have to move at the right pace and within your short term to make a change and to profit. If you don’t brokerages could find you. Margin calls could make trading a lot harder for every individual and could make it impossible to trade on your own in 2024.

4. No more ”magic” in the cryptos

People have seen it all by now and by this point, which is why no one is as excited about owning crypto. This applies and can be seen through a great example of the Japanese Shiba Inu dog breed that’s been on fire, as well as Dogecoin! Most investors are falling out of love with this trend, making it a lot harder for anyone to enjoy the profit or the magic.

5. Internet shut down that happened in Kazakhstan plays a huge role

Kazakhstan has been rocked by violent protests since the beginning of the year following rising fuel costs. This resulted in the government shutting down the internet for locals. Because of this relatively small move, BTC collapsed and experienced 12% of bitcoin’s global computational power. We are still experiencing the consequences, and who says that they might not happen again throughout the year?

6. China is not in the game

China’s bans on cryptocurrency are no longer news in the crypto world and almost everyone is aware of them by now. The buying market is set at $70 trillion, making the Chinese an important player in any niche or industry. Loads of foreign investments are being put on watch by Beijing. All these reactions are causing global ripples that are being felt in the crypto world.

What are some key components to watch out for? Top 3 of them to consider

Source: risk.net

Always look at the market value

How often do you pay close attention to everyday changes and switches?

MVRV is the ratio of a cryptocurrency’s market cap to its realized cap. When the MVRV reading is over 3.5, a top formation usually emerges, and investors become more likely to harvest their gains given high levels of MVRV reading. Just by reading the chart, one might be informed about any new (bad) changes incoming. Always study the market value and give yourself enough time to make a proper (responsible) move.

Outflow & inflow changes

Cash inflow is the money going into a business which could be from sales, investments, or financing. It’s the opposite of cash outflow, which is the money leaving the business. The biggest outflow happened on January 11th this year, and since then we have experienced a rebound in the price. Supplies in circulation will dedicate the price and demand. Although not as predictable, it is always a good idea to update on time and act accordingly.

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