Bitcoin prices fall to $88,522:Experts say if prices fall below $88,000 levels, it can lead to more downside

Bitcoin prices have slumped to $88,522, which is the lowest level in seven months. This has reduced the global crypto market value from $4.3 trillion to $3.2 trillion, meaning investors have lost more than $1 trillion. This decline has been 25-30% over the last 6 weeks. Analysts say these conditions have emerged due to reduced expectations of Fed rate cuts and liquidations, and it could go down to $75,000. How Bitcoin prices crashed?
Bitcoin touched a high of $126,000 in October. After this, its price fell sharply. When it slipped below the support of $92,000, many people who had bought Bitcoin on leverage (borrowed money) had their positions automatically closed. In one shock, trades worth more than $19 billion were liquidated. Due to this, Bitcoin has fallen more than 25% in the last 6 weeks and has come down about 30% from its peak. Automated trading bots and high leverage accelerated the decline. Earlier people were scared about AI companies’ expenses, but there was a slight bounce after Nvidia’s good results. On Thursday morning (London time), Bitcoin showed a 1.9% recovery, but the market is still uncertain.
Market Impact: Both Small and Large Investors in Loss
The crypto market was worth $4.3 trillion on 6 October. Now it has decreased to $3.2 trillion. This means about $1.1-1.2 trillion disappeared in one shock. Most of the losses are only on paper – meaning they occurred due to price drops and closure of leveraged trades. On 10 October, $19 billion worth of leveraged trades automatically closed in a single day. This spread fear, people started withdrawing money, funds were pulled out of Bitcoin ETF and new buyers stopped. Everyone from small investors to large crypto companies suffered losses.
5 Main Reasons for the Decline What Could Happen Next? If Bitcoin stays below $88,000-90,000, it could easily slide to $75,000. There are three important levels to watch now: $85,000, $80,000, and April’s lowest price of $74,425. Traders are buying lots of put options around $80,000, meaning everyone is hedging out of fear. Some experts say that if tech companies’ next results are good then there could be a recovery, but right now everyone is waiting for macro data (US economy figures). In the long term, big companies will invest again, then Bitcoin can make a good bounce back.
How does blockchain work? Think of blockchain as a chain of blocks. Each block is a page of copies that contains a list of transactions (for example, Aditya sent Vikram ₹100). When a block gets filled, it is locked and connected to the previous block. Computers called nodes check and store this information, ensuring it is correct and secure. Blockchain is also very secure because it uses mathematics and code to protect data. Since many computers keep copies of the blockchain, it is difficult to hack. Why is Bitcoin called Digital Gold? A special thing about Bitcoin is that its total supply is 21 million. No more Bitcoin will ever be created. This rule is already written in its technology. If Bitcoin was unlimited, just like printing more currency notes causes prices to rise, Bitcoin’s value could have decreased. Due to this limited supply, it is called “Digital Gold” because it is rare and valuable. What is the difference between Bitcoin and Fiat Currency? Fiat currency is the note or coin that the government prints, like a ₹500 note in India. If the government declares that this note is no longer valid, as happened during demonetization in 2016, its value can become zero. But, Bitcoin is like gold which has its own intrinsic value. This is because, like gold, it is rare and cannot be controlled by the government. Earlier, people used to buy things by giving grains or gold. Then the government printed paper notes. Initially, the value of currency was based on physical resources like gold or silver. The amount of gold you had determined how much currency you could print. Then the physical basis requirement was removed. Meaning, the government can print as many notes as it wants. But this leads to inflation. Bitcoin changes this entire system.