Cryptocurrency markets have been at their all time low since the start of this week.Bitcoin fell to its lowest ever level since January.On the other hand investors are devastated by Terra, a stablecoin which crashed and lost its one dollar peg:it was about about 62 cents on Thursday.Luna,another stable coin fell by about 95 percent to a mere 22 cents.Meanwhile Solano and Avalanche fell by 39 percent.Ethereum was no exception as it also experienced a dip in price along with other cryptocurrenies.Investors are losing their minds and cryptocurrency haters are enjoying their 'I told you so' moment.

What Makes Bitcoin Volatile?

Like any other currency,cryptocurrency price is volatile and certain factors contribute most to its volatility.These are:

Bitcoin Supply And Demand

By default the cryptocurrency has a limited 21 million coins to be owned.The price of the cryptocurrency basically varies in correlation to the supply and demand of it. The closer the total number of circulating coins get to the 21 million limit the rarer the coin becomes and therefore more expensive.It is not known what will happen to the price should the coin reach it's 21 million limit.However this event will make bitcoin mining a thing of the past as there won't be any free coins to mine anymore.The supply and demand of Bitcoin is the most contributing factor to bitcoin's volatility.

Bitcoin Investors' Activities

As the supply of bitcoin is becoming more limited,long term investors are holding on dearly to their coins to rack up more profit. 33 percent of all bitcoin is held by some top 10,000 investors according to reports from National Bureau of Economic Research.Whales,investors who own thousands of bitcoin,could most affect the entire bitcoin market.When a whale suddenly withdraws a large quantity of bitcoin,the total supply increases and this causes a decrease in bitcoin value.To prevent this situation most Exchange platforms have a limit for how much can be withdrawn within a day.This is usually a little below or above or exactly 50,000.Should a investors withdraw a lot of coins,anyone who has more than 50,000 USD in bitcoin will not be able to withdraw it all in time before the price falls and he or she makes a loss.

Influence Of The Media

You've probably seen a person on TV or social media who has made a fortune from investment in Cryptocurrency boldly or rather over confidently predicting that Bitcoin will be worth a certain value over 2 or 3 years.Though these predictions are usually far fetched,they do in fact affect the price of bitcoin(In a positive way of course).Such claims though may be ridiculous often persuades more people into investing and as a result boosts the coin in question.A notable example is when Billionaire Elon Musk called himself the doge father in a twitter post,causing investors to rush to invest and eventually making dogecoin increase in value.

So What Caused The Depreciation This Time?

According to reports,the depreciation is said to have been caused by investors rushing to sell their coins after the US Bureau of Labor Statistics reported that consumer prices were higher than anticipated for April.

Also what happened on Monday ,when TerraUSD ,one of the major stablecoins,fell below it's 1:1 peg to the dollar,partly contributed to bitcoin's depreciation.The hasn't been any better time to invest though.So while it sounds like the apocalypse to investors who have already invested in Cryptocurrency it's also music to the ears of new investors now buying Cryptocurrency.