Selling continues in bitcoin and cryptocurrency price, with bitcoin briefly trading just above $41,000. This is bitcoin’s biggest weekly route since November. The world’s #1 cryptocurrency has now fallen 37% to its peak of $58,000 that month.
Rest of the cryptocurrencies are giving it under selling pressure. Today the price of Ethereum is down 3.16%, Binance Coin is down 1.44% and the price of Solana is down 4.44%.
What’s the attack?
There are two main narratives that are driving cryptocurrency prices down.
First, as I wrote yesterday, the Fed makes a rapid U-turn in its policy to reduce inflation: “As recently as last March, the Fed promised not to raise rates until 2024. Today Its officials have raised three rates this year alone.
A rise in rates does not bode well for the price of bitcoin as its price action suggests that it behaves more like a technical stock than a safe-haven asset. And it’s tech stocks that soaring rates hit hardest.
“Indeed, bitcoin’s recent downturn coincided with the 10-year Treasury yield, which has risen from 1.52% on December 31st to 1.71% currently. And Crypto prices are closely related to Nasdaq
Second, unrest in Kazakhstan—which has become the world’s second largest mining hub after crackdown on Chinese miners—caused a nationwide internet blackout, halting 18% of global crypto mining capacity (aka hash rate). Gone.
“The hash rate is not directly related to the price of bitcoin, but it does indicate the security of the network, so a drop may scare investors in the short term,” wrote Marcus Sotirio, a digital asset analyst at GlobalBlocks.
Bitcoin Could Drop to $30,000 Amid “Extreme Fear”
This unfortunate macro backdrop is raising the ranks of bears in the crypto market.
CryptoAd, one of the most popular crypto commentators on Twitter, warned that bitcoin could drop to September’s low of 30,000: “[Bitcoin] Below the September lows, the liquidations could go down even with the wick”, he predicted amid yesterday’s crypto rout.
Antoine Trenchev, founder of crypto lending platform Nexo Businesshala If the bitcoin price breaks below $41,000, it “could turn ugly, with the mid-to-low thirties being a likely destination.”
Meanwhile, the Bitcoin Fear and Greed Index, which is a measure of sentiment among crypto market participants, indicates:extreme fear” according to a coindesk Analysis, the measure has been negative for an unusually long time and is at its lowest level since July.
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