BTC kept dipping and continued the price drop crisis this Friday to hit the lowest price since September at less than $42K, which is an alarm of crisis.
The king of cryptocurrencies dropped by more than 4.9% to reach $41,008, which is a 40% dip from its record in November at $69K, while the second popular cryptocurrency Etherem ETH declined by 9% to the lowest price level since September 30th. These both coins mentioned including Solana, Binance Coin, XRP and Cardano dipped by more than 10% in the past week. However, this dip is a series of other dips during the last quarter of 2021. Read more [Coins News: Bitcoin & Ethereum Dip While AVAX & LUNA Rose] and [Bitcoin Went Down To $47K In a Day After a $300M Liquidation].
The dip came right after the Federal Reserve meeting in December, which dealt with the chance earlier-than-expected rate increase along with a potential balance-sheet rundown.
Fundstrat strategists stated on Thursday:
“The Fed’s intention to reduce the balance sheet in Q1 2022 is the primary cause of this sell-off,” and added “Unfortunately, no immediate support looks likely ahead of September 2021 lows at $39,573, with breaks of that leading down to last summer’s May-July bottom”.
Last year was an epic year for BTC as it gained more than 60% of its value, surpassing all other asset among an enumeration which included institutional adoption, investment diversification as well as inflation protection. Moreover, the inflation rise led the central banks to be more strict with monetary policy, which may reduce the liquidity.
The head of research and strategy at crypto exchange AAX, Ben Caselin said
“As the crypto market matures, we can see major crypto assets such as Bitcoin and Ethereum increasingly move in tandem with traditional markets including Treasury bonds”.
Correspondingly, the BTC hash rate has dropped severely on Thursday to hit 176 million terahashes from its record of 208 million terahashes on Jan 1st.
Antoni Trenchev, co-founder of crypto lender Nexo said:
Bitcoin price break below $41K “could get ugly, with the mid-to-low thirties a possible destination,” and added, Bitcoin endured a two-month period of consolidation in the $30K to $40K range from May to July last year, and “a repeat of history can’t be ruled out as Fed tightening remains the popular narrative”.