The Bitcoin price saw a modest increase over the weekend, reaching near $24k, however, these gains were short-lived and were erased during the European trading session as the price fell to around $23k.
The crypto market saw a liquidation of over $116 million in the past 24 hours. According to the latest market update from Coingecko, the total crypto market capitalization has decreased by 2% to $1.087 trillion.
The decline in Bitcoin price is indicative of a dip in the entire crypto market, as expected. Ethereum is currently trading at around $1,578, a 2% decrease from its value earlier today.
Among meme coins, Floki Inu experienced the largest decline, dropping 17% and trading at around $0.00002375.
Factors Attributing To BTC’s Price Crash
The fluctuations in Bitcoin’s market can be attributed to various macroeconomic factors, including the upcoming statement from the Federal Reserve on interest rates.
Most analysts anticipate the Fed to raise interest rates by over 25 basis points, which Mathew Dixon, CEO of Evai.io, believes will drive the Bitcoin price upward.
Additionally, a declining dollar is seen as a positive for Bitcoin, which is widely considered as a hedge against inflation.
Despite this, there have been ongoing discussions about a potential correction in Bitcoin’s price.
Binance has been accused of manipulating the market by pumping up the price using its BUSD market. As a result, it is expected that short-term holders and miners will outnumber the whale buyers, leading to a correction.
As January 2023 draws to a close, crypto analysts will closely monitor the monthly close. According to popular analyst Rekt Capital, a close above $23.4k on the monthly candle would indicate bullish sentiment.
Meanwhile, long-term Bitcoin attributes indicate a possible multi-week consolidation towards next year’s halving event. Most analysts expect Bitcoin to retest ATH and enter the price discovery region after the 2024 halving.
As the crypto market continues to evolve, it will be interesting to see how the industry reacts to the latest developments. Do you think Bitcoin will bounce back or continue its downward trend? Let us know your predictions.
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Nidhi is a Certified Digital Marketing Executive and Passionate crypto Journalist covering the world of alternative currencies. She shares the latest and trending news on Cryptocurrency and Blockchain.
Cryptocurrency markets have been highly volatile and, in recent weeks, have seen major price drops. Many investors are wondering why these markets dropped suddenly and what may lead to a recovery. Here, we look at the top reasons why crypto markets have dropped suddenly and highlight potential recovery strategies.
Firstly, the recent ban on Chinese financial institutions providing services to cryptocurrency exchanges has had an impact on the markets. Such restrictions on use and trade of cryptos has undoubtedly contributed to market pressure and further price drops in recent days.
In addition to this, some market watchers attribute the recent drops to tax season in the United States. An increase in people selling off their crypto holdings to pay taxes may have resulted in more investors looking to sell, leading to more pressure in the market.
Finally, a lack of institutional involvement in the markets has likely had an impact on the recent price drops. Without the presence of institutional investors in these markets, which have been traditionally seen as highly volatile, it has made it much harder for larger market players to increase investment and help reverse the current market trend.
Although the cryptocurrency markets are currently in a negative state, there are steps which can be taken to help restore investor confidence and drive the markets upward. The introduction of institutional-grade vehicles, such as custody solutions, regulated exchanges and investment products, could help provide more security and stability in the market. Additionally, offering tax incentives on long-term cryptocurrency holdings could help to encourage more investors to keep their coins rather than sell them off to pay taxes.
In conclusion, the crypto markets have recently seen sudden drops due to a variety of factors, including Chinese restrictions, tax season and a lack of institutional involvement. By introducing more institutional-grade vehicles and providing tax incentives, investors could be encouraged to invest again and drive the markets upward.