The recent plunge in the cryptocurrency market, what is the reason behind it? Is it time to buy the bottom now?

In the past three days, the price of Bitcoin has fallen by nearly 10%, and other altcoins have also generally fallen, and the entire cryptocurrency market has suffered a heavy blow. The market panic is spreading. Does this mean that a rare buying opportunity has arrived? The following is an analysis of the main reasons:

1. Local conflicts in the Middle East have intensified, and the US government has also notified its embassy staff and families in Israel to take refuge on their own. Such regional turmoil often leads to a sharp decline in financial markets.

2. In his speech, Federal Reserve Chairman Powell lowered the interest rate cut from the expected 125 basis points to 100 basis points. Although the Federal Reserve still plans to continue to cut interest rates to support economic growth, it is not in a hurry to cut interest rates significantly. Powell emphasized that the economic situation is sound and the Fed's goal is to maintain stability rather than rush to further cut interest rates.

3. The Japanese stock market has been hit. The Nikkei index has plummeted recently and triggered a circuit breaker. This may be because the previously rumored crisis has not been resolved, or the impact of the new prime minister taking office and raising interest rates. The plunge in Bitcoin in early August was also related to the triggering of a circuit breaker by the plunge in Japanese stocks.

4. US JOLT job vacancies increased to 8.04 million, higher than the expected 7.65 million.

5. The US ISM manufacturing PMI was 47.2%, the largest drop since May 2023, lower than the expected 47.5%, and shrunk for the sixth consecutive month.

If the market continues to fall and panic intensifies, is it possible to buy at the bottom now? My opinion is that it is possible. Judging from historical trends, the market crash caused by such news is usually a rare opportunity to buy at the bottom. As long as the expectations and value of the currency have not changed, the price drop caused by external influences actually reduces the cost. As the ancients said, there must be a surge after a sharp drop. Refer to the rebound of Bitcoin from $48,000 to $65,000 after the sharp drop in early August. Holding valuable spot, time will prove that all negatives are temporary.