On Monday January 10, Bitcoin plunged its price below $40,000 for the first time since September 2021. The negative record therefore heightened a bear trend that began six weeks ago. Today, the lowest price reached during this fall was $39,558. The dip saw more than $295 million liquidated across the entire crypto market in the past 24 hours alone. At the time of writing, the crypto is changing hands at $41,374, down 21% so far in 2022. This is one of the worst-ever start of the year, as the cryptocurrency registered its biggest weekly drop since early December. Bitcoin price is currently more than 40% down from its all-time high of $69,000, which was experienced on November 9.
According to the current Bollinger band as depicted by the TradingView chart, the price of the flagship cryptocurrency is experiencing predictable volatility as bears appear to pull the market toward the $30,000 zone. “And we're dipping into the $40K region for Bitcoin, through which the fear will only accelerate even more. People are considering selling off partially at this stage, as they expect markets to drop further. Next to that, most of the people are assuming we're only going down, as a bear thesis is currently the primary scenario,” Michaël van de Poppe commented about the current Bitcoin price.
Meanwhile, altcoins have also joined in the current panic mode. Today, Ether (ETH) also slipped below $3,000 for the first time since early October. Others in the top ten crypto coins by market capitalization also shed more than 5% of their value on the day.
The bearish formation witnessed on Monday appears to be a continuation of the dynamic of the Bitcoin price started last week. Factors like the unrest in Kazakhstan and the US Federal Reserve's willingness to cut interest rates sooner than expected are being considered as some of the possible reasons for the broad macro market environment turning bearish.
On January 5, the US Federal Reserve (Fed) announced that it may accelerate the timetable for increasing interest rates. This means that the Fed will stop its money-printing operations and instead will make it more expensive to borrow to keep a cap on inflation. The price of Bitcoin and other crypto coins dropped after the announcement of the news.
Besides that, on January 7, Bitcoin fell below $43,000 after political unrest in Kazakhstan adversely affected the Bitcoin network. Protests in the country incited by anger over soaring fuel prices intensified into clashes. The violence led to a country-wide internet shutdown on Thursday last week, and as result rendered Bitcoin miners in the nation unable to join the crypto network. This led to Bitcoin prices and other crypto assets taking a plunge throughout the day.
However, it is interesting to note that cryptocurrency is not the only affected industry. Wall Street's major averages also turned red today. The Nasdaq Composite is down 1.72% whereas The FTSE 100 is down 0.18%.
