Bitcoin expanded its fall on Monday and is now halved from its record height.
Cryptocurrencies have fallen for six of the last seven days, falling 10% on Monday morning from the 5 pm level on Friday. According to CoinDesk data, it was below the lowest level since July before the afternoon rebound of $ 33,000 and recently rose 2.9% to $ 35,745. Bitcoin’s highest record reached $ 68,990.90 on November 8.
Drops aren’t all that surprising to crypto enthusiasts. According to Charlie Bilello of Compound Capital Advisors, Bitcoin is the eighth time since it was launched in 2009, a decrease of more than 50%, and the third time since 2018. It decreased by 52% from April to July last year.
Cryptocurrencies have been wiped out with more risky assets, especially the widespread market sellouts that hit tech companies. According to analysts, the driving force is to withdraw stimuli from the US Federal Reserve and its economy and raise interest rates. Technology-intensive Nasdaq’s stock index has fallen 12% since the beginning of the year.
“Cryptography is a fast-growing early industry traded as a risky asset,” said Martha Reyes, head of research at Bequant, a European digital asset broker. “This morning is very dramatic and is fully driven by the Fed’s buffeted macro environment.”
According to Reyes, individual investors are also stepping back from investing in cryptocurrencies. According to data from blockchain data research firm Glassnode, the volume of small transfers used by retailers on behalf of retailers fell by more than 40% between the first and fourth quarters of last year.
This may be due to the shift in market interest to more trendy digital assets. Google searched for the acronym “NFT” for non-fungible tokens and steadily increased from last year to 2022. On the other hand, the search for “bitcoin” decreased in June last year and remained at a low level until it increased due to the sold-out last week.
Some cryptocurrencies are even lower than Bitcoin. Ether, the second most popular digital currency, is down 52% from the last record, also recorded in November. Solana, the cryptocurrency that gained popularity last year, fell 66%, and another meme-based digital currency, the Shiba Inu, fell 78%.
“It makes sense to me that a wide range of cryptocurrencies are hit hard. It’s all about innovation that correlates with risky assets,” said Joel Kruger, currency strategist at Exchange LMAX Group. Games, NFTs, decentralized finance projects, smart contracts, etc. “Ethereum is like an index that is the sum of all the projects on the Ethereum blockchain.”
This move is in contrast to the expectations of some investors and analysts. Analysts at JPMorgan said Bitcoin could eventually reach $ 146,000 in October.
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