if the economy goes bad, crypto is not spared

  • 2

What times those in which the bitcoin reached 68,000 dollars. It seems like a long time ago, but no way: it was November 2021. Just over six months have passed, and today bitcoin is below $24,000. The drop that was already huge a month ago continues to worsen. The question is, of course, why?

Yet another bump. Bitcoin has been falling steadily. He has done it almost constantly in the last 12 weeks, when he was still toying with whether or not to go over $40,000. Since then the smacks in the value of bitcoin and the rest of cryptocurrencies they have been unique. Ethereum, which seemed even somewhat more resistant to such movements, has come down from the $1,200 barrier when not long ago it seemed to be very settled in the $3,000-4,000 range. It doesn’t help that the adoption of the new PoS mechanism for Ethereum is being delayed.

December 2020 levels. It had been more than a year and a half since cryptocurrencies had not been so low. Most of them were around these levels at the end of 2020, but they did so with an opposite trend: they did not stop growing and everything suggested that they would continue to do so. Volatility was the norm again, and today we find a bitcoin that has lost 65% of its value compared to its all-time high… and that is one of those that has “least” lost.

Will it drop below 20,000? That is the question that some investors are now asking, who believe that as things stand bitcoin could even drop below 20,000 dollars and reach levels that were reached in December 2017, five years ago. It would not be unreasonable because nothing is unreasonable in this segment, and in fact after reaching $20,000 at that time, bitcoin was plummeting for months and fell as low as $3,000. The roller coaster doesn’t stop.

Predicting the growth of bitcoin seems impossible: these charts prove it

Inflation spares no one. The truth is that it is no longer possible to look at cryptocurrencies and see them very differently from other financial assets. Institutional and business interest has made bitcoin and others now part of a market that is closely aligned with conventional exchanges.

Inflation has been weighing down the economy for months, and this new drop can be seen in the bad data from the United States, where the Consumer Price Index (CPI), its consumer price index, has grown by 8.6% compared to last year , and that was expected to go down.

To all this has been added the recent chaos caused by Celsius Network, the largest cryptocurrency lending company in the US. This Monday the company announced that it had frozen asset withdrawals claiming an “extreme” market situation.

Tech also falls. The measures to try to curb inflation have not had particularly notable effects so far, and in fact the shares of the big technology companies are also falling significantly: Apple, Microsoft, Tesla, Netflix or Google are losing between 3 and 1 today. 5% even before the opening of the US markets, spectacular falls for giants of this caliber.

“Risky” stocks have it tough. The increases in interest rates that have already been approved in the US and have just been approved in Europe are a striking measure to try to stop this spiral, but they harm the possible growth of securities with more risk and volatility such as those of technology companies or, of course, cryptocurrencies. Those rate hikes are going to go higher by all accounts, and that makes those cryptocurrencies less attractive for investors. So, more possible falls, as we said.

What times those in which the bitcoin reached 68,000 dollars. It seems like a long time ago, but no way:…

What times those in which the bitcoin reached 68,000 dollars. It seems like a long time ago, but no way:…

Leave a Reply

Your email address will not be published.