- Drastic sell-off could happen if Bitcoin drops below 40K, experts claim.
- Crypto Fear and Greed Index set at ‘extreme fear’ level, pushing investors to move their assets into less risky operations.
- Kazakhstan’s crackdown on Bitcoin miners contributed to the longest Bitcoin losing streak since 2018.
- According to experts, although a serious blow, this is not the end of Bitcoin.
Bouncing Back From The Psychological Level of $40,000
Over the last ten days, Bitcoin fell in price drastically. This is the longest losing streak in the last three and a half years, and it happened approximately 60 days after Bitcoin hit an all-time high. Instead of well over $68,000, at the time of writing this article Bitcoin was selling at just above $41,000, which is a 40% drop compared to its maximum value. The experts predict that an even steeper sell-off could happen if Bitcoin value falls below what is called ‘a key psychological level’, set at the $40,000 mark.
It is not unusual that particular goods suffer a significant price correction right after they achieve all-time price highs, but the latest losses, their severity and scale, could mean that Bitcoin will not reach a six-figure value in 2022. Experts predict that the 2020/21 Bitcoin price jumps finally came to an end, due to several factors, but it does not mean that the days of cryptos are numbered.
As crypto analyst Marcus Sotiriou told The Independent, $40,000 remains a ‘key level of support’, reminding us that the last time the price of Bitcoin was this low, in September 2021, it bounced back swiftly from the psychological level of $40,000. Sotiriou, an expert from digital asset broker GlobalBlock, said that he expects an ‘upside in the short term, due to the interaction with such a significant level’, and points out that one of the factors which brought the Bitcoin price down is the Crypto Fear and Greed Index, a system devised to measure the pulse of the market by analysing exchange data, social media, and online search trends.
At the moment, Crypto Fear and Greed Index is registering the lowest level since cryptocurrencies hit the bottom in July 2021, simply dubbed ‘extreme fear’. It has a lot to do with the global economic climate and stock exchange decline at the beginning of 2022, combined with an expected increase of rates by the United States Federal Reserve which could force investors to move money away from risky businesses to more secure ones.
In addition to global financial processes, Kazakhstan’s crackdown on Bitcoin miners also contributed to the crypto’s devaluation. Kazakhstan is the second country in the world in terms of Bitcoin production, right after the United States of America, and we had a chance to witness a similar price drop in 2021 when the People’s Republic of China decided to ban Bitcoin mining.