Bitcoin (BTC) begins its first full week of 2022 in familiar territory below $50,000. Since the end of December, 2021, bitcoin has experienced several declines of varying degrees. On Jan. 5, it even plunged to below $43,000, plummeting near 10% within only 8 hours. Bitcoin is finally making some big moves and we can expect the next few days to be highly volatile.
The cryptocurrency market sentiment which has been displaying extreme fear intensified after a prolonged period of sluggish performance and the recent plunge. Crypto Fear & Greed Index had a low of 15 (the lower the index, the more fear).
What comes with the downtrend moves and fear sentiments are a series of bad news:
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Equities Markets and Fed Sharp Corrections
The U.S. equities markets pulled back at the closing bell after minutes from the Federal Reserve’s December FOMC meeting showed that the regulator is committed to decreasing its balance sheet and increasing interest rates in 2022. As stock markets corrected, BTC price followed suit by dropping below $44,000, setting off a cascade of liquidations that reached $222 million in less than an hour.
“Bitcoin will be volatile in this period, both an effect of stock market volatility, but also from sharp Fed course corrections”, Charles Edwards, founder of asset manager Capriole, noted in a series of tweets on January 3rd.
Continuous Crackdown on Multinational Regulatory Policies
The policies of regulators in different countries towards BTC are also putting pressure on the market. As one of the world’s biggest crypto mining countries, Iran is shutting down crypto mining centers again to reduce liquid fuel consumption in power plants amid decreasing temperatures. Meanwhile, Kosovo joins Kazakhstan, Iran, and Iceland in imposing restrictions on Bitcoin mining due to overloaded energy grids.
Besides, members of Parliament in the U.K. are pushing for increased regulatory oversight of crypto assets this year and South Korea’s National Tax Service announced that from January 2022, citizens were required to pay tax for the cryptocurrencies payment.
Bitcoin Network Hash Rate to Tumble 13.4%
On Wednesday, Kazakhstan, the second-largest country in the world when it comes to Bitcoin mining hash rate, experienced unprecedented political unrest. The state-owned Kazakhtelecom shut down the nation’s internet, causing network activity to plunge to 2% of daily heights. The move dealt a severe blow to Bitcoin mining activity in the country, which accounts for 18% of the worldwide Bitcoin network’s hash activity. As per data compiled by YCharts.com, the Bitcoin network’s overall hash rate declined 13.4% in the hours after the shutdown from about 205,000 petahash per second (PH/s) to 177,330 PH/s. It undoubtedly has a great impact on global bitcoin mining.
What’s next for BTC?
When BTC fell from its all-time high of $68,000 to its current level of $42,500, it was down a total of 37.5%. Most analysts thought it had entered a bear market at the time.
But judging from recent performance, more professionals believe that a reversal is more likely:
- The market share of BTC has gradually recovered to more than 40% these days, in other words, if BTC doesn’t nuke, then alt season hasn’t even started, the market will now focus on BTC instead of altcoin.
- As can be seen from the daily chart, BTC has left and stood on the descending channel.
Looking back on the weekly line, we will find that around 40,500 was the support level (yellow line) under the long-term, which means that a lot of funds will guard this price, it is very strong, and now it is at this price and stopped falling, this It means that there is more room for upside than downside.
How to profit in the next market?
If you want to profit from the next market, you may need to know 100 times leveraged futures trading cryptocurrency. With 100x leverage futures trading, you can either buy up (go long) or sell down (go short), which means that you can take profits whether the market rises or falls. What’s more, 100 times leverage can magnify your profits by 100 times.
How does 100x Leverage Work?
Traders can open a position with only a 1% margin required with this tool. For example, if we used 1 BTC to open a short contract at the price of $46,800 on January 5th and close it 8 hours later when Bitcoin was trading at $42,500, our profit will be ($46,800 – $42,500) * 100 BTC / $42,500 = 10.11BTC, making the ROI of more than 1000%.
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