The cryptocurrency markets have tanked. All major top tokens are bleeding red and the global market cap fell 7.30 per cent and is now reduced to $1.67 trillion.
As per data from CoinMarketCap as of 14:00 IST, even top crypto tokens like Bitcoin, Ethereum, Cardano, and Solana felt the hit of the crash. Bitcoin broke its support levels and is now trading at $36,285.07 after falling 8.20 per cent in the last 24 hours.
Ethereum fell around 7 per cent. Solana and Cardano each were respectively over 10 and 11 per cent down.
Memecoins like Dogecoin and Shiba Inu also felt the hit. Elon Musk’s favorite crypto token, Dogecoin, fell over 5 per cent and Shiba Inu crashed over 6 per cent in the last 24 hours.
So, this begs the question, what should investors do now? Should they also sell of their holding amid the raging negative sentiments in the markets or should they HODL?
Crypto prices in the short term
Most analysts expect continued short-term volatility for Bitcoin and other cryptocurrencies. Some, such as Bill Noble, a senior analyst at Token Metrics, see a fall to $20,000 as the worst case scenario for Bitcoin. Veteran trader Peter Brandt thinks the lead crypto might fall to $28,000.
Traders often use charting tools and patterns to try to forecast various possibilities and potential support levels. As such, it’s not that Noble is predicting the lead crypto will drop to $20,000. The analyst told Insider he’s looking at various possible scenarios, including an optimistic $56,000. Noble said $28,000 is a more likely point for the market to level out.
Popular YouTuber and crypto analyst, Michaël van de Poppe, explained in his latest video that we’ve lost the resistance level of $37,500. If Bitcoin can reclaim it, it may be able to push higher. However, he’s watching several lower levels, including prices around $32,000.
Bitcoin is the market leader, and where it goes, the rest of the market tends to follow. Ethereum (ETH), the second biggest crypto, faces additional near-term uncertainty. It is in the process of a huge upgrade and has just had to delay the rollout of its next step.
Crypto prices in the long term
Long-term price predictions for Bitcoin range from nothing to $1 million or more and everything in between. Amongst other things, Bitcoin skeptics worry it has no inherent value and doesn’t produce anything. Warren Buffett’s right hand man at Berkshire Hathaway, Vice Chairman Charlie Munger, has been extremely vocal in his views that the value of Bitcoin may well go to $0.
Bitcoin believers point to increased crypto adoption and its potential to become the digital currency of the future. In January, Cathie Wood’s Ark Invest predicted Bitcoin could reach and exceed $1 million by 2030. “We believe bitcoin is the most profound application of public blockchains, the foundation of ‘self-sovereign’ digital money,” said the report.
Others, such as billionaire investor Mark Cuban, compare crypto to the early days of the internet. Cuban is a big fan of Ethereum’s smart contract capability, and sees Bitcoin as more akin to digital gold.
What of Ethereum? A recent survey of 36 industry experts by Finder reflected concerns about the Ethereum merge and wider upgrade. Nonetheless, they felt ETH might reach over $23,000 by the end of 2030. It’s currently trading at under $3,000.
Trading vs. investing
Many of the short-term price predictions above come from traders rather than investors. Traders tend to take a short-term approach, trying to profit from price fluctuations. On the other hand, investors try to build wealth by holding assets for the long term. Here at The Ascent, we favor long-term investing.
Nobody has a crystal ball. And even long-term investors need to be prepared for further crypto price drops in the coming months. This means only investing money you can afford to lose, and making sure crypto only represents a small percentage of your overall portfolio. If you think Bitcoin and crypto have long-term potential, look for ways to mitigate the risks involved in crypto investing.
Position yourself so you can wait out any dips in the short term and you’re not dependent on potential — and as yet unrealized — gains from crypto. That way, if Bitcoin reaches $1 million by 2030, you’ll be able to reap the rewards. But if the worst happens and the market collapses completely, you’ll still be able to achieve your financial goals.