In the last weekend of May 2021, Bitcoin slumped and traders were worried about a bout of extreme volatility.
It was a 7% slump, nearing $35,500 and prices dropped by 18% right after a 10% spike. The Bank of Japan governor Haruhiko Kuroda expressed his concerns about the instability of the cryptocurrency and how this particular industry can have adverse effects on traders.
Bitcoin has been around since 2009 and while its popularity has increased, many central bankers have voiced concerns about it. The Bank of Japan governor Haruhiko Kuroda stated that Bitcoin trading is speculative and with such high rates of volatility, the cryptocurrency is not a way of achieving settlement.
While Bitcoin prices were around $35,500 during the weekend, according to Swissquote analyst Ipek Ozkardeskaya, the key marker was at $30,000 and below that marker, the Bitcoin market would have to deal with sustained declines, reaching bear market stage.
The volatility of Bitcoin as a cryptocurrency is an issue that traders have been trying to deal with for a long time. Kuroda's views on the nature and impact of Bitcoin on traders have been echoed by others, as more and more investors join in Bitcoin trading.
It is an established fact that Bitcoin can be volatile. But you can still protect your funds during cryptocurrency trading. A contract for difference provider like easyMarkets, that is available on web, as an app and on Metatrader 4, provides risk management tools that help you trade safely and efficiently.
While volatility is an issue and Kuroda's concerns are valid, features like no slippage and negative balance protection can help you avoid losses. If Bitcoin slumps or the market crashes, you can short sell via a CFD and still make a profit, even if by small margins.
The bitcoin trade has crashed before, but there have been some big surges recently that have had a good impact on traders. The cryptocurrency market saw a surge in Bitcoin prices in March 2021, when the prices reached $61,733. Earlier in the year the price steadily increased from $46,750 to $50,963.72 within the span of a few days.
There have been many people interested in investing in Bitcoin and if you are one of them, then the volatility of the cryptocurrency should not be that difficult to deal with. Choose a platform like easyMarkets that will let you buy and sell whenever you want, and will provide detailed analysis of the market so that you can assess your trades.
In the light of the recent slump, Oanda analyst Edward Moya specified that the consolidation of Bitcoin will continue and this volatility will not last for an extended period, as long as the momentum is maintained till the $37,000 marker. The crash would be significantly impactful, if that momentum was breached. Such an impact would be very difficult for some traders to recover from, especially as the pandemic has already introduced financial instability. The Bank of Japan governor Haruhiko Kuroda addressed this issue as well, in an interview discussing monetary policy, adding to his negative views on the use of bitcoin for trading on the stock market.
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