Economist says bitcoin could fall below $40,000 in high inflation

Bitcoin continues to fall - the price of the main cryptocurrency has fallen below the $42,000 mark, altcoins are also suffering losses. One of the reasons for the fall in the rate and sales may be the disconnection of the Internet mining centers in Kazakhstan
Bitcoin price, according to CoinMarketCap, has fallen over the past 24 hoursThe bitcoin was up 3.25 percent to $41,751. At the beginning of the month, bitcoin was worth $47,000.

Over the past week, the price of bitcoin has fallen 11.4%, with about $41,800 per coin, down from $47,000 at the beginning of the week. On Thursday, the price of bitcoin dipped to nearly $42,000. Some experts attribute the new cryptocurrency sell-off to the shutdownThe cryptocurrency exchange rate has returned to its September 2021 level. The rate of cryptocurrency returned to the indicators of September 2021.

During the week, the value of other cryptocurrencies also declined. Thus, Ethereum lost 13.2% in price during the week, falling in price to $3200. Market capitalizationEthereum fell from $451 billion to $386 billion, bitcoin - to $795 billion. Solana rate fell to $138.8, 18.2%, Shiba Inu - 14% (to $0.00002903), Dogecoin - 10.3% ($0.1523).

According to TTRCoin.com, over $810 million worth of positions were liquidated in the cryptocurrency market during the previous day. on bitcoin futures alone, traderThe futures market lost $317 million; 87% of the liquidated positions were long. The same ratio was noted for futures of other cryptocurrencies. There were liquidations of $241 mln on OKEx, $236 mln on Binance. Compared to December, the volume of active positions on the futures market decreased by 15%.

Bitcoin could reach a value of $100,000, Goldman Sachs predicted. It believes this is possible if the cryptocurrency can take market share away from gold. Bitcoin rose to a record high of nearly $69,000 in November, but fell to its lowest since September in early January
The value of bitcoin could rise to $100,000, Bloomberg wrote, citing analysts at Goldman Sachs. According to the bank, the value of the most popular cryptocurrency could rise if bitcoin can take market share away from gold - It is traditionally considered a "safe" asset in which investors invest during market turmoil.

The market capitalization of bitcoin, adjusted for turnover, is now slightly less than $700 billion, Goldman Sachs estimates. That's about 20% of the total market share that bitcoin and gold have together: the value of gold in the market is estimated at $2.6 trillion, Bloomberg wrote. If bitcoin's share of that tandem "hypothetically" rises above 50% in the next five years, its price will exceed $100,000, and the aggregateThe agency cited the forecast of Goldman Sachs co-head of global foreign exchange, interest rates and emerging economies Zach Pandle.

The Goldman Sachs expert noted that bitcoin will rise in price due to the increasing popularity among institutional investors. An obstacle to the process may be the high consumption of resources to run the bitcoin network, but the demand for the asset, this circumstance will not stop, quoted Pandla Bloomberg. Bitcoin's disadvantages are similar to those of gold: no interest or dividends are paid on bitcoins, the agency added.
In early November, bitcoin renewed its record value, rising to nearly $69,000. Since then, however, the cryptocurrency's value has mostly fallen. The day before, the bitcoin rate fell below $41,000 - to its lowest since September 2021. The cryptocurrency lost 40% of its value in three months, Reuters noted. Bitcoin and other cryptocurrencies are now considered risky assets, investmentThe following is an analysis of the eToro trading platform, Kalli Cox.

According to Todd Morakis, co-founder of digital financial services provider JST Capital, the decline in bitcoin's value was caused, among other things, by the unrest in Kazakhstan, which became a major cryptocurrency mining hub after China tightened regulation. CNBC warned that miners could shut down operations in Kazakhstan after protests in the country shut down the Internet and with it up to 15 percent of the global bitcoin network..
On Monday, January 10, the price of bitcoin is rising. As of 10:10 MSK, the first cryptocurrency is trading at $42,083.4 (+0.42%), according to CoinMarketCap. Over the New Year holidays, bitcoin managed to survive the collapse from levels above $47,000 to nearly $40,000.

Ether rose to $3163.15 (+0.82%). Binance Coin rose 1.57% to $442.8.

"The cryptocurrency market received moderate support from retail buyers over the weekend. Over the past 24 hours, the capitalization of all coins rose 0.22%, according to CoinMarketCap estimates, approaching $1.97 trillion.
The top altcoins are losing 11-19% over the week, but over the weekend, thehave been losing their buyers. The $2 trillion mark in total crypto valuation last week turned into local resistance, from which selling intensified. Nevertheless, strong buying on declines still prevents the market from forming a downward spiral.
Cryptocurrency In.The Fear and Greed Index was stuck at 23 over the weekend, indicating extreme fear. Since November 18, this index has been in the lower half of the scale. Optimists, however, may note that the indicator has bounced back from the 10 level.
The dip here in May-July coincided with the minminds within the momentum, hinting at the potential for a technical rebound. Technical analysis also gives hope for a rebound in BTC/USD, where the RSI on the daily charts shows attempts to move out of the oversold area below 30 and the price is cruising near the reversal area in September."

Vadim Shovkun, a practicing trader and founder of the Crypto Shaman project, tells about the current market situation.

There is extreme fear in the market - on January 8, 2022 the indicator Fear & Greed has registered the value of 10, which has been registered seldom before. Let's understand if we should give in to panic and when it is relatively safe to return to a bullish mood from the market.

A BUI pattern was formed after an exit from the range of $46,415-$52,045. The exit occurredThe price went as under the PoC of the penultimate wave of growth. This was discussed in the previous review.

At the moment there are some prerequisites for the recovery of long positions, which should be considered. Two updates of price lows (on the Binance spot) passed sluggishly, protective volume of the buyer at the level of $41,000 is formed, as at the minimum movement the volume is increased.

ObservedThere is also a slight bullish divergence on the lower hourly timeframes. The market sentiment, which is very negative, should also be taken into account.

But there are still many technical arguments in favor of the decrease. Impulse BUI, which has not been absorbed yet, speaks about total dominance of sellers. It is worth to consider the character of price movement in the end of September: the market began to form the last wave of growth, at the same time not having removed liquidity, whichIt took a week to create.

Now the market has absorbed the wave completely, the price is close to this liquidity and another shelf is formed.

Closure under $39 500 will be a serious sign of transition to the bearish phase, above $48 480 - return to the range after the formed false breakdown, fixing above the PoC of this range and the past growth wave. After that you can consider the market from the point of view of buying.

Based on the technicalTheir observations above, it is most likely that the price will form a bounce up from the current marks, up to the retest of the $46,415-$52,045 range. However, it is then expected to update to a low under $39,500. Whether it will be a consolidation move is difficult to calculate, but the probability of reaching this mark is high.

The area of $44,950-$46,250 is an excellent area to look for short positions, as they will actually be on the break of the local bearish trendа.The DFINITY Foundation, the nonprofit organization behind the development of the Internet Computer ecosystem, announced that it has completed the first phase of its ICP smart contract rollout on the bitcoin network.

In the first of three phases, the developers provided the ability to generate ECDSA threshold signatures used for bitcoin transactions.

The next steps involve creation of a testnet and full integration of Internet Computer and the first cryptocurrency.

The team began work on the "direct integration of the Internet computer with the bitcoin blockchain" in September 2021.

DFINITY mentioned the opinion of Vitalik Buterin, whoHe supported the concept of a multichain ecosystem, but was pessimistic about the prospects of crosschain bridges because of security concerns.

According to the developers, their solution is fully consistent with the The views of the co-founder of the second most capitalized cryptocurrency.

Recall that in December, Psychedelic announced the launch of an interconnect protocol for interaction between the Internet Computer network and the Ethereum blockchain.Bitcoin could break down $40,000 if inflation continues to exceed market expectations. Economist Alex Krueger outlined such a scenario in the context of the Fed's tightening of monetary policy.

The sensitivity to macroeconomic news is due to a change in the course of the Fed's monetary policy, Krueger is convinced. He recalled the refusal to assess the "temporary" nature of inflation and the willingness to begin to reduce the balance sheet after the start of the key rate hike in the minutes for the December meeting.

On December 14-15, the Fed moved the timing of the final rollback of its asset-buying program from June to March. Updated projections suggest three rate hikes each.I key rate in the next two years. The previous one in September allowed only one increase in 2022 and two in 2023.

Krueger expressed concern that the Fed's balance sheet cuts would provoke a bear market. The reason lies in the decision to reduce liquidity in the face of a rate hike. The "hawkish" reversal occurred in less than six months, the analyst stressed.

"Few had considered the Fed's impending normalization. Not only is it possible in the near term, but the Fed is discussing implementing it at a faster pace than in 2018. For this reason, cryptocurrencies fell 15-30% in two days last week," the specialist explained.

For digital assets "he "quantitative tightening" may pose a challenge because they are at the furthest end of the risk curve.

Just as they have benefited from extremely loose monetary policy, cryptocurrencies could come under pressure from its unexpectedly tight nature as capital shifts to safer asset classes, Krueger explained.

The economist called bitcoin an indicator of the state of liquidity in the financial system. As it diminishes, macro-oriented players sell digital gold, followed by other cryptocurrencies (the disappearance of this correlation remains a "pipe dream").

Krueger drew parallels with shikkoin, calling the U.S. dollar the king among them, and the Fed the master of them.

"As the Fed moves from increasing supply (the size of its balance sheet) to decreasing it, the dollar begins to rise. And everything else loses value to it," he explained.

The expert allowed bitcoin to bounce into the $41,000-$44,000 range before Wednesday's inflation report. The nature of the data will determine the further course of events. The expert urged to take cautious positions until the end of the first quarter. He did not rule out that purchases will take longer, and favorable conditions may not come in May.

Everything will depend on the dynamics of consumer prices, which are as followsome of the time, Krueger is convinced that this will be a downward trend. The impact of tightening monetary policy, the resolution of supply chain problems and the dominance of deflationary forces on the long-term horizon will contribute to this.

"The question is, will inflation fall fast enough, or will the Fed have time to 'upset' everyone? If the Fed is 'too hawkish,' Houston, we have a problem," Krueger concluded.

Recall that in December, billionaire Louis Navelier allowed bitcoin to fall to $10,000. According to him, on the chart of the first cryptocurrency, the signal of formation of a "double top" is increasing, the realization of which may come as the Fed normalizes monetary policy.

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