Bitcoin plunges below $30,000 to hit 10-month low

The price of the largest cryptocurrency dropped below $30k briefly on Tuesday morning

Representation of a glistening bitcoin                                 
The price of Bitcoin has plunged more than 50% since its peak in November 2021 – Photo: Shutterstock
                                

After experiencing a week-long decline, the price of bitcoin dropped below the $30,000 mark briefly early on Tuesday morning, according to CoinMarketCap. The last time bitcoin traded around the $30,000 level was back in July 2021 when BTC was trading at $29,301.

The price of the largest cryptocurrency managed to recover slightly later on Tuesday, and is currently trading at around $31,180 at the time of writing on 10 May 2022.

Bitcoin’s price has plunged more than 50% since its peak on 10 November 2021 of $68,789.63, leaving several analysts and investors trying to understand what’s influencing the markets.

Market influence

It seems the overall crypto market has witnessed a negative trend throughout the past few days with an overall sell-off mood dominating the sector. Yesterday, all coins in the top 10 were down, with ETH plunging to as low as $2,200,00, according to Currency.com.

Several analysts are linking bitcoin and the overall market’s drop to the broader influence of the US Federal Reserve’s aggressive monetary tightening.

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The plunge could also be occuring in tandem with the de-pegging of stablecoin TerraUSD (UST), which left the the price of Terra (LUNA) dropping by more than 50% over the last few days to return to September 2021 levels, leaving investor confidence in jeopardy.

Price signal for MicroStrategy

The news of bitcoin’s plunge could be worrying for instituational firms, such as MicroStrategy. At the beginning of the year, Michael Saylor, MicroStrategy’s CEO, told Bloomberg’s Emily Chang that bitcoin’s price was set to grow exponentially in the near future, and explained why the firm took the decision to put the cryptocurrency on MicroStrategy’s balance sheet and become the world’s biggest institutional investor in cryptocurrency.

MicroStrategy has taken out billions of dollars in debt to buy more than 100,000 bitcoin over the past two years, with Saylor stating the firm’s future plans include buying even more.

However, MicroStrategy revealed earlier this month that should the cryptocurrency drop to $21,000, it would face a margin call for its $205m bitcoin loan with Silvergate Bank, forcing it to sell the cryptocurrency to recover its loan.

Further reading

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