Why Did Bitcoin Crash? Kale Abrahamson Explains It All Here!
Since the start of December, Bitcoin crashed to $42,000. Following this, news stories have been developed to suggest how different events could impact the cryptocurrency market. Followers can find insights from Kale Abrahamson about investing in Bitcoin here, where he weighs in on the accuracy of these reports. With that in mind, he advises his followers to pay attention to the following:
Lately, the media has claimed that Evergrande, a large Chinese real estate company, has defaulted from billions of dollars in debt. This suggests that the price of Bitcoin could drop as a result. Typically, when the price of cryptocurrency drops, investors tend to panic sell to make as much profit as possible. However, Abrahamson advises those involved in Bitcoin investment from doing so.
Omicron Variant News
According to reports, the omicron variant poses a danger to millions of people around the world. According to Abrahamson, the news is fake and he compares the Omicron virus to the common cold and other illnesses commonly spread. Moreover, he states that variants developing from a virus are something that unavoidably happens.
He compares selling coins to when a team member of the Warriors has to guard Stephen Curry and feels frustrated having to do so. However, Stephen Curry starts playing with excellence, leaving everyone in shock. Once again, he advises Bitcoin investors to not sell their coins based on the fear spread in the news.
Jerome Powell Claims
According to reports, Federal Reserve Chairman Jerome Powell suggested that the government may taper, or decrease its purchases of bonds in response to inflation, meaning that less money will be printed. However, Abrahamson states that the government will not stop producing money due to inflation. Moreover, he asserts that the members of the federal government have a vague, or uncertain, scheduling for meetings to discuss these issues.
Abrahamson states that there is a meeting scheduled on December 15 for Powell and the board of directors to discuss the possibility of tapering. Abrahamson also says that the federal reserve will not pay off any withstanding debt it has.
Two Events Currently Happening During the Bitcoin Crash
Ethereum And The Fear and Greed Index
As the value of Bitcoin drops, Ethereum, a blockchain where people can buy and sell crypto, is more successful than Bitcoin after Bitcoin’s crash. But, Abrahamson states that the Ethereum to Bitcoin chart should not be depicting this high performance. He explains that when there is less greed in the market right now, and Ethereum is doing well compared to Bitcoin, the market is currently at “peak fear”, or when there is the highest amount of fear among investors in the crypto market.
He explains that when Bitcoin dropped from roughly $59,000 to $30,000, Bitcoin was doing well compared to Ethereum. During the last few weeks, the Fear and Greed index has progressively decreased to 30, a high number. The lower the number, the higher amount of fear and greed is present in the market. He tells his followers that the index will be 15 in the next few days.
Evergrande is still at the brink of default, and the emergence of the omicron variant caused the price of Bitcoin to drop significantly. Additionally, the federal government is still considering the idea of tapering in response to inflation. Lastly, Ethereum, according to experts, is likely to keep outperforming Bitcoin, and the Fear and Greed index was currently at 27 compared to 30 a few days ago.
Like what you read? You can read more about the insights that Kale Abrahamson has about investing in Bitcoin on his YouTube channel! Or you can learn about what Kale Abrahamson has to say about crypto by scrolling through his other blogs.