Bitcoin fell below $20,000 over the weekend and remains below that mark on Monday after US Federal Reserve Chairman Jerome Powell made comments during the annual economic symposium at Jackson Hole on Friday.
The bitcoin exchange rate at 15:00 TC on Monday fell by 0.9% and amounted to $19,812 thousand.
The Fed will continue to raise the key rate until inflation is under control, and this is likely to “cause some pain for households and businesses,” Powell said.
Such “hawkish” statements also had a negative impact on the US stock market. The Dow Jones Industrial Average plunged the most since May on Friday.
The price of bitcoin did not fall below $20K for about a month and rose to $25,199K in mid-August. Since the beginning of the year, the value of the cryptocurrency has collapsed by 57% amid tightening monetary policy in the world, which could cause a recession.
The price of Ethereum, another popular crypto-currency, is down 2.35% on Monday to around $1,449k. Ethereum has dropped 60% since the start of the year.
Bitcoin is trading near the psychologically important mark of $20,000 on Monday after the fall of the cryptocurrency rate on Saturday to the lowest level in 18 months.
According to CoinDesk, the price of bitcoin at 11:35 Moscow time is $20444. On Saturday, it fell to $17,630, but on Sunday it bounced back above $20,000.
Last week, during which the Federal Reserve System (Fed) raised the base rate by 75 basis points (bp) at once, turned out to be quite volatile for the cryptocurrency market, and experts believe that the current week will also be difficult, writes Market Watch.
“We may be out of the bottom of the market if bitcoin can quickly rise above $20,000 and hold there on Tuesday-Wednesday,” said Winnie Langham, chief executive officer of streaming platform Waitroom. become a tough resistance level.”
Bitcoin has fallen 57% since the beginning of the year, and its fall from the November peak of $69,000 is about 70%.
While some analysts see the beginning of a new “crypto winter” that will eventually end, others believe that the current downturn in the cryptocurrency market could mean the end of the industry as a whole.
The ethereum exchange rate, which also fell sharply on Saturday, rose in price by 15% over the past 24 hours, to $1113.28.
Two days earlier, market expert Igor Stakovichenko, responding to a request from Open4Business, said that in the current situation, the fall of the bitcoin market below 22,000 launched a new, even deeper “bearish phase” of the cycle, as it greatly shook the position of long-term holders of the asset. The long-term holders, who had held their positions during the last drops, could not stand it and started dumping the cue ball at the lowest prices.
“This shook the entire structure, and both technical and macroeconomic indicators today indicate a possible fall in the main cryptocurrency to 16,000 or even lower,” the expert said.
However, according to Stakovichenko, it is too early to bury bitcoin, as “whales” (investors owning more than 10,000 BTC) continue to accumulate this digital currency, which may indicate the possibility of growth in the medium and long term. In addition, the expert predicted possible stabilization and even some growth of the world’s main cryptocurrency.
Yesterday, Bitcoin once again came close to the critical level of $20,000 per 1 BTC. Even the record-breaking increase in the interest rate of the Fed did not save the main cryptocurrency from falling. However, it could not save, since cryptocurrencies are a fairly young investment asset, which has not yet been affected by transition periods and changing phases of economic growth.
The crypto market continues to develop according to its own rules, remaining a speculative product, the high volatility of which attracts a large number of traders who are ready to take risks for the sake of quick earnings. Most often, such traders massively buy cryptocurrency during the growth phase and start to get rid of it just as massively when the market falls, which stimulates a further collapse.
But this time the situation is somewhat different. Many analysts are talking about the beginning of the “darkest time for crypto” in its entire history. The traditional opponents of bitcoin have also revived. Thus, the famous financier Warren Buffett recently stated:
“If I were now offered to buy bitcoins at $25, I would not take them. What should I do with them then? I would have to sell them back to you later. This is a dead end.”
And he added that he doesn’t know if bitcoin will rise or fall next year, in five or ten years, but he knows for sure that he does not produce anything.
The Open4business publication turned to Igor Stakovichenko, an expert in economics and finance, with a request to comment on the situation in the cryptocurrency market. According to the economist, the problem of the lack of a real resource and production base for digital assets has become especially acute in recent months. This is due to the fact that Russian aggression in Ukraine disrupted supply chains and led to higher prices for real sector products in the global economy.
“The fall in the capitalization of the largest companies and the crisis in the stock market naturally led to the collapse of the cryptocurrency market, as many investors considered this asset too risky,” the financier notes.
Stakovichenko stressed that in the current situation, the fall of the bitcoin market below 22,000 launched a new, even deeper “bearish phase” of the cycle, as it greatly shook the position of long-term holders of the asset. The long-term holders, who had held their positions during the last drops, could not stand it and started dumping the cue ball at the lowest prices.
“This shook the whole structure, and both technical and macroeconomic indicators today indicate a possible fall of the main cryptocurrency to 16,000 or even lower,” the expert said.
However, according to Stakovichenko, it is still too early to bury bitcoin, as “whales” (investors owning more than 10,000 BTC) still continue to accumulate this digital currency, which may indicate the possibility of growth in the medium and long term.
BITCOIN, CRYPTOCURRENCY, CRYPTOCURRENCY_MARKET, EXPERT, FINANCE, STAKOVICHENKO, ИГОРЬ_СТАКОВИЧЕНКО
The rate of bitcoin against the US dollar fell on Monday to a minimum of six weeks against the backdrop of a general risk aversion from investors due to signals of the “hawkish” mood of the Federal Reserve System (Fed).
The value of the cryptocurrency fell during trading to the lowest level since March 15, $38,223, which is 20% lower than the peak level recorded last month. As of 15:00 CST, the bitcoin rate is $38,812.
Ether (Ether) on Monday fell to $ 2799 – a minimum since March 18.
Experts note that technical analysis indicators point to the possibility of a further rollback of bitcoin.
“Bitcoin breaks a key two-month trend line, which could mean a further pullback to January lows,” said Fundstrat analyst Mark Newton, quoted by Market Watch. He expects bitcoin to drop to $36,300, and if it goes lower, he could test the $32,950 level.
Currently, bitcoin is closer to the lower end of the $35,000-45,000 price range in which it has been trading since the beginning of this year.
The dynamics of the cryptocurrency clearly correlates with the dynamics of the Nasdaq 100 index of technology companies, with a negative correlation with the dollar.
As investors wait for a substantial increase in the base interest rate by the Federal Reserve System (Fed) in the coming months, some of the factors that support the demand for cryptocurrencies are fading away.
“As it becomes more profitable to hold dollars, investors can shift funds from bitcoin or gold,” Nydig experts say. “We see a negative correlation of bitcoin’s performance with both the dollar and interest rates.”
Bitcoin’s momentum is still largely driven by fundamental factors such as user growth and the expansion of the crypto usage network, but it’s important to understand the emerging macroeconomic links as well, says Nydig.
The bitcoin rate on Monday fell to its lowest level in more than a month, ether (Ether) – below $ 3,000.
The pressure on the cryptocurrency market is exerted by the general risk aversion of investors, as well as signals of restrained demand from new investors, Bloomberg notes.
As of 1:45 p.m., the bitcoin rate retreated 3.05% to $39,058. Earlier in the session, it fell below $39,000.
The exchange rate of ether fell by 4.2% to $2916.6.
Technical analysis shows that despite bitcoin’s recent drop, the cryptocurrency is “not yet close to oversold levels” and the nearest support level of $35,000 is likely not to hold, said 22V Research analyst John Rock.
“We remain confident that bitcoin will drop to $30,000,” the expert says.
The cost of bitcoin has fallen by 5% over the past month, and by almost 16% since the beginning of the year.
The capitalization of the global cryptocurrency market, according to CoinGecko, has decreased by 4% over the past 24 hours, to $1.9 trillion.
Bitcoin and other cryptocurrencies decline on Friday, with some of the largest digital assets posting their biggest drop in weeks as risk appetite wanes, Barron’s writes.
Bitcoin has lost over 4% in the past 24 hours but is holding above the key technical level of $45,000. The price of the cryptocurrency jumped above this indicator last Sunday and continued to rise at the beginning of the week, rising above $48,000.
Meanwhile, on Thursday, bitcoin began to decline as investors exited risky assets, including cryptocurrencies and equities. By Thursday evening, its price had fallen more than 3%, showing the most significant one-day drop since March 10, according to Dow Jones Market Data.
“Bitcoin’s rally is fading, and the Wall Street session, which was accompanied by risk aversion, could lead to continued pressure on cryptocurrencies,” said Edward Moya, an analyst at Oanda.
The price of the most popular cryptocurrency at the beginning of 2022 was around $46,200 and remains well below the high of $68,990 reached in early November.
Meanwhile, some market participants believe that the fall in prices may be short-term, said Barron’s.
Meanwhile, the price of Ethereum, the second-largest cryptocurrency by capitalization, fell more than 3% below $3,300, also showing the largest one-day decline since early March on Thursday.
