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Bitcoin Plunged Into A New Low After Dropping Below $33,000

After hitting a new low, Bitcoin surged to a positive level. Bitcoin and Ethereum are down at the moment 45 percent and 49 percent, respectively, from their all-time highs. Investors are concerned about the Federal Reserve’s expected higher interest rates and strict financial regulations, which has caused the price to continue to fall.

Bitcoin has continued to fall this week, despite moving into positive territory. On Monday, bitcoin plummeted to its lowest price of $32,982.11. In the afternoon, though, the market cap surged by 5.6 percent as the price rose to $37,183.25. At the time of writing, the live Bitcoin price was $36,447, up 9% in the last 24 hours. Aside from cryptocurrency, the S&P 500 has also entered bear market territory.

Investors to Sell to Reduce Risks

There are growing concerns about inflation rates as the value of major cryptocurrencies continues to fall. Investors may continue to sell assets to decrease risk due to the recent drop and extreme volatility. After witnessing constant price decreases since the beginning of the year, the stock market has also had its worst week. Investors are liquidating riskier assets in anticipation of the Federal Reserve’s strict monetary policies.

Ethereum has slumped to $2,176.41, its lowest level in months. It grew by 1.1 percent to $2,444.85 last time. Bitcoin has fallen 45% from its all-time high, while Ethereum has fallen 49% from its all-time high.

Russia’s central bank has recommended prohibiting cryptocurrency mining and trading, indicating that the crypto market may soon be exposed to more governmental restrictions. Currently, there is a lack of confidence in the market.

According to Vijay Ayyar, vice president of business development and international expansion, Bitcoin will have to test the $30,000-32,000 level. If bitcoin maintains over $30,000 for a week, a base will form in that range. Given the current market position, it will take time until the crypto market turns bullish.

Due to the continual reduction in bitcoin’s price and growing inflation, investors are in a hard place right now. While many bitcoin proponents have long claimed that the coin can be used as an inflation hedge, the current situation shows that this is not the case, especially for new investors.

There are fears that a hawkish Fed may harm the crypto market, causing enormous losses. Because of the substantial institutional interest in bitcoin, there are more short-term investors in the market keeping an eye on its valuation.

According to Leah Wald, CEO of digital asset investment manager Valkyrie Funds, the primary concern is to anticipate the reaction of the stock market to the Fed meeting, which will be held this week. The stock market is also going through its worst week since the pandemic, so everyone should watch out for the outcome on the stock market. 

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