If you’re wondering, “Is Bitcoin a good investment?” Here’s some news for you. Bitcoin and other cryptocurrencies fell on Tuesday, sliding farther away from the high point of this year’s advance as a correction from last month’s high continued.
Bitcoin’s price has dropped 1% in the last 24 hours to $27,150 after briefly falling below $27,000 in previous trade. The largest cryptocurrency remains below the psychologically and technically significant $30,000 mark, which Bitcoin broke over in April for the first time since June 2022 but has since failed to consolidate close, losing additional territory over the previous week. While Bitcoin is still up by around two-thirds this year, the rise may be losing steam and is due for a correction.
According to Craig Erlam, an analyst at broker Oanda, Bitcoin looks to be stabilizing around $27,000 in the immediate term, although there is still downside danger after shattering this significant support level last week. It found support around $26,000, but it may struggle to get major traction higher.
This year, much of Bitcoin’s gain has been driven by hopes that the Federal Reserve would halt its campaign of tightening financial conditions and may even decrease interest rates later this year. Interest rate hikes were primarily to blame for last year’s selloff in digital assets, as cryptos, like tech stocks, have proven sensitive to rising rates, which decrease demand for higher-risk investments.
However, recent signals showing lower inflation — which may allow the Fed to back off aggressive monetary policy — have failed to move Bitcoin significantly, perhaps signaling that positive emotion in the present environment is nearly spent. This is even though the same economic factors have helped the tech-heavy Nasdaq Composite beat the Dow Jones Industrial Average and the S&P 500.
According to Oanda’s Erlam, the market has had a great run this year, so a pullback makes sense. If Bitcoin falls below $26,000, $25,000 is the next possible support level. So, if you’re wondering, “Is Bitcoin a good investment?” It is when you know when to invest in it.
Beyond Bitcoin, the second-largest cryptocurrency, Ether, fell less than 1% to $1,820. Smaller cryptos or altcoins performed similarly, with Cardano and Polygon falling by 1%. Memecoins were also down, with Dogecoin and Shiba Inu both losing 1%.