Bitcoin began a correction, but there is nothing to fear for now
|The bitcoin price is declining, dropping to $47K to its lows from last week, failing to gain support from buyers after rising above $50K earlier in the week.
From the lows of July, when the price briefly dipped below $30K, the rate is up 72%, peaking at the start of the week, so a corrective pullback offsets some of the short-term overheating.
Further declines down to $42K-$44K are not beyond the market's usual pullbacks, but a deeper dive would bring back a more negative scenario.
The hash rate recovery is worth paying attention to. According to the latest data from CryptoQuant, computing capacity on the Bitcoin network has tripled from lows a few months earlier, when it fell on the expulsion of miners from China. The hash rate recovery has been attributed to the rise in price, as it means the network is becoming more secure.
We are highly likely to approach the point where new rules for the crypto market and exchanges will come into effect. No one wants to "stifle" the technology in its early stages of development, and at the moment, paying for services with Bitcoin or Ethereum is very complicated and expensive for ordinary users. Still, you have to understand that the growth of an active user base will change the attitude of regulators.
The wave of mass implementation of cryptocurrencies in everyday life will likely come from South America and the Middle East. Despite recent events in Afghanistan, the country has been listed as a promising destination for cryptocurrency adoption.
Another positive factor can be seen in the news that U.S. banking giant Citigroup is waiting for regulatory approval to launch Bitcoin futures trading on the CME.
The bank is facing a surge in demand for cryptocurrency as the price of digital currencies rises. Futures themselves don't necessarily carry a positive for the price, but market participants are always positive about the acceptance of cryptocurrencies by traditional finance.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.