After rallying to more than $64,000 in April, Bitcoin fell to a two-week low on Tuesday. The world’s premier cryptocurrency reached as low as $30,000, leading some analysts to suggest an impending technical breakdown. However, many investors disagree, arguing that sell signals have not yet appeared in Bitcoin’s price chart, even though short-term momentum has slowed down.
What caused Tuesday’s Bitcoin slump? For a while, many investors thought cryptocurrencies were beyond government control. But on Monday, U.S. law officials said they recovered 64 bitcoins paid in ransom to the hackers of Colonial Pipeline. The FBI recovered the Bitcoin by getting their hands on the digital wallet hackers used to move the ransom. To add fuel to the fire, the Internal Revenue Service (IRS) asked Congress for the authority to collect cryptocurrency data. Bitcoin can’t catch a break, and it seems like looming regulations by governments are weighing down on Bitcoin’s price.
No one knows exactly how the FBI got their hands on the recovered Bitcoin, which scares investors who thought Bitcoin was entirely immune to government meddling. The FBI’s ability to trace and recover Bitcoin goes against the anti-establishment mentality that led to its creation. However, the breach could also be considered beneficial for the crypto industry as it seeks mainstream adoption.
Many investors are unfazed by Bitcoin’s latest fall from grace. Just last week, thousands of Bitcoin lovers went to Miami to attend the largest Bitcoin event in history. At the event, crypto fanatics emphasized no one— not even Elon Musk or governments — can stop Bitcoin.
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.