Looking at 2020 overall, is the decline in the last quarter of the year for Bitcoin, which has performed well despite the ups and downs? Cryptocurrency analyst focusing on 3 main issues for the reason for the BTC drop; The US elections stressed the panic of aid packages and the 2nd coronavirus wave.
2020 has been a very active year for the Bitcoin front. After losing 60% value in early March due to the pandemic effect, BTC increased its value by a great 220% as it approached a safe haven for investors. Although most assets have recovered with the fall of the dollar, Bitcoin-led cryptocurrencies have become the top earner of 2020 by overtaking them all.
According to Bitcoinist, a bearish trend can now be observed for Bitcoin as we enter the last quarter of 2020. Here are 3 main reasons behind a possible Bitcoin drop:
The Uncertain Environment Created by the US Presidential Elections
- The uncertainty about the outcome of the US presidential elections scheduled for November caused concerns on investors. While polls show Joe Biden’s win, incumbent President Donald Trump can still turn the arrows around.
- Statements made in the first recent debate between Biden and Trump led to further strain in the market.
- Investors were affected by this uncertain environment, and in September they tended to cash in on their assets.
- Meanwhile, although Bitcoin closed the third quarter in a positive zone, it closed the month of September with a 9% drop, affected by the events.
- In October, it is expected that investors will abstain as it is just before the elections.
- Although no major declines are expected in Bitcoin and Wall Street, a fluctuating picture is predicted.
- In this scenario, if the investor continues to rely on the cash, the Bitcoin price could return to the support zones of $ 10,400, $ 10,200 and $ 10,000.
- In the long run, Bitcoin investors can see this drop as a buying opportunity and keep the decline above $ 10 thousand.
Investors Wanting to Compensate Their Losses by Selling Bitcoin
- The people in the USA, who are increasingly economically depressed, have their eyes on the second coronavirus stimulus package.
- On the other hand, as economists say that no consensus can be reached in the incentive package until the elections, the pressure on investors increases.
- The unemployed, small and medium-sized enterprises in the USA can apply more ways such as mortgages and loans in the fourth quarter.
- This situation may cause a decline in financial stocks, one of the backbones of the US economy.
- Investors can dispose of their cryptocurrencies to avoid Wall Street losses with minimal damage.
- This may result in fluctuation in Bitcoin and therefore crypto currency exchanges.
Second Coronavirus Wave Risk
- Investors, who are now facing cash in an environment of uncertainty, may cause a picture like the first periods of the pandemic.
- Bitcoin managed to come out of the March crash with the momentum created by the US aid package move.
- Now, the delay of the new stimulus package has begun to squeeze both the S&P 500 and the Bitcoin wing.
- For this reason, if a new incentive package is not available, investors may tend to sell their Bitcoins due to concerns about the 2nd coronavirus wave.
- This attitude can cause the Bitcoin price to go back below $ 10K.