International Expert: “Bitcoin Price May Fall Below $ 20,000”

International Expert: “Bitcoin Price May Fall Below $ 20,000”

Bitcoin price has risen slightly after falling below $ 40,000 per coin on January 10th. However, experts are still warning of the currency’s deep depreciation in the near future.

After falling below the threshold $ 40,000/ dong on January 10th (Vietnam time) the Bitcoin price rose a little. On the night of January 11th, the world’s largest cryptocurrency was trading, according to CoinMarketCap data $ 42,000/ dong, a slight increase of 1.62% compared to the previous 24 hours.

Bitcoin‘s market capitalization has yet to hit that mark, however 800 Billion USD. Compared to the summit $ 69,000/ dong was founded on November 10th, Bitcoin price fell 39.15%.

Meanwhile, ether – the second largest cryptocurrency – has increased by more than 4%. recovered $ 3,132/Copper. At the same time, other cryptocurrencies also recovered. However, the total market capitalization of cryptocurrencies has yet to hit the threshold 2,000 won Billion USD.

Strong volatility

“Bitcoin price is still struggling to return to the top. This could reduce the outlook for this coin in the coming weeks, ”commented financial expert Craig Erlam (based in London).

“Cryptocurrencies have fallen out of favor as interest rates can rise. BTC needs more positive news to get back on its feet,” he added.

“If monetary easing has been one of the main ‘catalysts’ helping the bitcoin boom in the past two years, then the crypto world could enter a more difficult year 2022. From central banks. Central banks around the world, including the US federal government The Reserve (Fed) is going into tightening mode, “argued Erlam.

“It is very difficult to predict the price of Bitcoin in the short term, especially when the market turns more negative,” he commented. According to the expert, Bitcoin has ceased to function as a safe haven.

“Bitcoin got off to an amazing start into 2022. There has been a lot of volatility,” commented Ms. Fiona Cincotta, senior financial analyst at City Index.

“We all know that the price of Bitcoin is very volatile. But even with Bitcoin, the fluctuations are enormous, ”she added.

BTC was created by an anonymous person or organization called Satoshi Nakamoto after the 2008 global financial crisis. BTC price has increased by almost 500% since the end of 2019.

According to Bloomberg, the pandemic is a “catalyst” that is bringing BTC closer to mainstream financial asset status. More and more private and institutional investors are entering the cryptocurrency market.

During the pandemic, central banks and governments around the world also launched stimulus packages of unprecedented proportions to prop up the economy. The US Federal Reserve (Fed) has now signaled a tightening policy. This can affect risky assets like stocks and cryptocurrencies.

Falling below the threshold $ 20,000/Copper

“Cryptocurrencies are likely to come under further pressure as the Fed cuts the amount of money it pumps into the economy,” said Jay Hatfield, CEO of Infrastructure Capital Advisors.

“BTC price could end below threshold in 2022” $ 20,000/ dong, “warned the expert.

University of Sussex finance professor Carol Alexander even warned that BTC’s price would fall below the threshold 10,000 USD/ dong in 2022, wiping out any gains made in the past 2 years.

“If I were an investor, I would think about selling Bitcoin. Because the price could fall next year, ”she claimed. Ms. Alexander said that Bitcoin “has no fundamental value” and is “more of a toy than an investment”.

“The Fed’s tightening policy affects not only interest rates, but also the risk premium,” said Hatfield.

The risk premium is the difference between the expected return on an investment and the risk-free interest rate. In other words, this is the additional return an investor would get by holding a risky portfolio in the market, rather than risk-free assets.

“Risky investments like technology, meme stocks and cryptocurrencies suffer more than the rest of the market. Because these investments are almost twice as volatile as the overall market. Therefore, the risk premium of these investments is also twice that of the overall market.” Share, ”he added.

According to CoinShares data, for example 207 Million dollars flowed from digital investment products. The asset management company says Bitcoin alone saw the future 107 Million dollars leave the market.

But according to Genesis Global Trading’s Noelle Acheson, the investors who sold Bitcoin were mostly short-term traders.

Acheson’s analysis shows that long-term Bitcoin investors are looking for ways to “fish from below”.