Concerns are growing over further declines as Bitcoin prices have barely maintained their $40,000 support. This is because the possibility of early quantitative tightening (QT) within the first half of this year, including the U.S. Federal Reserve’s rate hike and tapering (reduction of asset purchases), has increased. Cryptocurrency prices such as Bitcoin are also falling in a flurry as investors’ selling trend continues to decline in the New York stock market, including NASDAQ.
According to CoinMarketCap, bitcoin price was $41,842.16 as of 10:20 a.m. GMT+8 on the 10th, down 0.22% from 24 hours ago. CoinDesk explained that Bitcoin has fallen for six consecutive days and then risen again to remain at the $40,000 level.
Earlier on the 7th, bitcoin prices fell below $41,000, the lowest in about three months since September 29 last year. According to Bloomberg News, Bitcoin is currently down 42% from its high point of close to $69,000 in November last year. Last week, blocking Internet access in Kazakhstan, the world’s second-largest cryptocurrency mining area, also raised uncertainties in the cryptocurrency market.
Analysts say the fall in cryptocurrency prices is largely due to the U.S. tightening monetary policy. In the FOMC minutes, the U.S. Fed hinted at the possibility of reducing its holdings earlier than in the past.
If the U.S. recovers liquidity, other countries will have no choice but to reduce economic stimulus measures. Bloomberg pointed out, “In this case, high-growth speculative assets such as Bitcoin are less attractive.”
The fall in cryptocurrency prices may be the beginning of a “mini bearish market,” said Eric Irvin, CEO of Black Force Capital. In the market, attention is being paid to whether Bitcoin prices will be able to keep the $40,000 mark. Mike McGlon of Bloomberg Intelligence told Bloomberg that $40,000 is an important technical support for Bitcoin.
Experts’ prospects for bitcoin prices are at odds. Carol Alexander, a professor at the University of Sosex in the UK, also predicted last month that Bitcoin could fall to $10,000 this year.
Earlier last week, Goldman Sachs predicted that Bitcoin could rise to $100,000 in five years.
Goldman Sachs predicted that Bitcoin’s share in the value storage asset market consisting of gold and Bitcoin will exceed 50% in the next five years.
