What is happening with Bitcoin and why its plummet?

On By Garmin Philip

In recent weeks we are witnessing one of the most intense bearish streaks of Bitcoin. And it is that since in November of last year this digital currency marked a new historical maximum, it does not stop going backwards, standing at the current 42,000 dollars.

Bitcoin’s journey, which was forecast to rise in late 2021, is currently experiencing a precipitous decline that is far from the targets that were set.

Today, Friday, January 7, we woke up with the cryptocurrency price below $ 42,000, for the first time since the end of September. This has seen its value fall by more than 12% in the last 7 days.

It’s difficult to explain cryptocurrency price movements with definite precision, but the market crash appears to be tied to the Federal Reserve. To combat rising inflation rates, the Fed could raise interest rates earlier than expected, according to the minutes.

This is something that we could already see on December 1 when Fed Chairman Jerome Powell declared an acceleration in the elimination of the stimulus program from the economy.

This It didn’t just affect the cryptocurrency market. The Nasdaq is down 3.3% since Wednesday, while the Dow Jones industrial index fell just over 1%. However, it is true that volatility in digital currencies causes sharper declines.

The index of fear and greed of Bitcoin, designed to measure market sentiment, is at its lowest level since last July.

However, another factor that may be affecting the price of Bitcoin is the current Fuel price riots in Kazakhstan. Since China cracked down on cryptocurrency mining in 2021, many have moved their operations to Kazakhstan. Now more Bitcoin is mined in this country than in any other (with the sole exception of the United States).

Following widespread protests, which left several dead and more than 1,000 injured on Wednesday and Thursday, the Kazakhstan government shut down the internet, causing the Bitcoin hashrate (a measure of computing power used to verify transactions and minting new Bitcoin) fell by 13%.

On the other hand, it is obvious that the fear of new cases of coronavirus due to the omicron variant It is generating fear in governments due to the possibility of new restrictions and its collateral damage in the economy.

Despite all this, the investor market remains optimistic And many analysts predict an even better 2022 than last year for the cryptocurrency market. On BTC’s side, Kjetil Hove Pettersen, CEO of the Norwegian Bitcoin miner states: “I expect a strong increase in the short term, in 2022 we can see it for 140,000 dollars or more“.

“I believe in the $ 250,000 of BTC at the end of 2022 based on the large number of Bitcoin mining companies that were founded in the United States in 2021“predicts Schucman, senior vice president of the digital currency division of Bitcoin miner CleanSpark.

As we can see, these figures seem totally unattainable, especially considering how the world economy is currently posed at the beginning of the year with the omicron variant hitting the economies. We will have to wait and see how it develops and if we finally have to agree with these analysts and many others.



Reference-computerhoy.com