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Bitcoin is rolling into the abyss: the cost of the first cryptocurrency collapsed to the lows of September

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Relevance up to 12:00 2022-01-08 UTC+00

At the opening of trading on Friday, the main digital coin broke a monthly low near the $ 41,600 mark.

Further, the decline of Bitcoin began to intensify during the Asian session, when the cryptocurrency fell below $ 41,000 and was at the price level of September last year.

The participants of the crypto market have been observing a permanent decline in BTC since Wednesday. Then the digital asset broke through the December support around $ 45,500. At the same time, Bitcoin has already lost 11.4% in value since Monday, and its market capitalization has dropped to $ 795 billion.

By the way, the leading altcoins hastened to adopt the trend of the main virtual asset and began to actively decline after it. So, during the week, the Ethereum cryptocurrency lost 31.2% and today is trading at around $ 3,200 per coin. Altcoin Solana sank by 18.2% and cost $ 138.8. The Shiba Inu coin fell by 14% to $ 0.00002903, and Elon Musk’s pet Dogecoin fell by 10.3% to $ 0.1523.

It’s hard to say that the fall of the first cryptocurrency happened unexpectedly. The reason for the sharp collapse of BTC, market analysts call several factors at once.

First, the release of the minutes of the last meeting of the US Federal Reserve System on Wednesday. According to data received from the Fed, rate hikes can be expected as early as March 2022. Traditionally, an increase in the cost of borrowed funds negatively affects the price of all risky assets, including cryptocurrencies.

Second, the shutdown of the Internet, including mining centers, in Kazakhstan against the background of unrest in the country. As a result, the hashrate of the Bitcoin network instantly sank by 12%. Since Kazakhstan hosts about 18% of the global mining capacity of the first cryptocurrency, and the state itself ranks second in the world in coin mining, disconnecting the country from the global network instantly affected the price of BTC.

At the same time, the ratio of long positions to short positions in the margin market of virtual assets remains high, which often causes tangible collapses of cryptocurrencies to eliminate collateral positions.

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