Factors that caused the price of Bitcoin to lose the $40,000 mark

Factors that caused the price of Bitcoin to lose the $40,000 mark

Bitcoin price has dropped below $40,000 and the entire crypto market is also in a sell-off phase.

More than 2 months since the new peak on 69,000 won U.S. dollar In November 2021, Bitcoin price fell by more than 43%. The impact of the global economy is said to be the main reason investors are gradually withdrawing from the cryptocurrency market.

On January 21st at 11 a.m., bitcoin price fell to just 38,700 U.S. dollar. In just 11 hours from the night of January 20, the main cryptocurrency on the market lost more than 10% of its value.

Other cryptocurrencies also depreciated sharply. Ethereum, Binance Coin or Cardano, Solana, the rest of the top 5 cryptocurrencies by market cap all lost more than 10% over the same period. According to Coinglass, after only 24 hours approx 700 million dollars the value of investor orders has “evaporated” from the market.

Excessive lowering 40,000 won U.S. dollar This is a dangerous signal for Bitcoin as it is considered a strong support area for this cryptocurrency. Compared to the record level 68,700 U.S. dollar/BTC was created on 11/10. established, bitcoin is down nearly 43%.

The fall in Bitcoin price over the past 2 months is said to have been influenced by global economic and financial conditions. Bitcoin and cryptocurrencies in general are still considered high-risk assets. Therefore, when many central banks propose to raise interest rates to control inflation, risky assets are weighed down.

“If monetary easing was one of the key ‘catalysts’ that helped Bitcoin boom over the past two years, then the crypto world could be heading into a tougher 2022 as the Reserve (Fed) move into tightening mode,” said Craig Erlam, a London-based financial expert.

Jay Hatfield, CEO of Infrastructure Capital Advisors, also agrees that the entire crypto market will come under pressure as the Fed reduces the amount of money flowing into the economy.

Meanwhile, recent news also had a negative impact on the market. On January 20, the Central Bank of Russia proposed to ban the use and mining of cryptocurrencies on the territory for fear of affecting financial stability, public welfare and monetary policy.

In addition, a number of recent hacks with a damage level of several tens million dollars It also inspires investor confidence in large companies. Cryptocurrency exchange crypto.com is the latest victim to be hacked and taken over 33 million dollars, even hackers have been able to launder money through the Tornado Cash platform.

However, there are also some investment advisors who are optimistic about the short-term prospects of the crypto market. Speaking to Bloomberg, Harry Yeh, founder and director of investment fund Quantum Fintech Group, said stablecoins bring a lot of positive news when the overall market corrects lower.

Mr. Harry said that more printing activities and many stablecoin projects were set up as evidence of new capital inflows into the cryptocurrency market.

In addition to the crypto market, various tech stocks were also affected. The Nasdaq fell 5% last week while the S&P 500 fell for three weeks.

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