Bitcoin has fallen 14% this year after falling below $40,000 for the first time since September last year. Worst start to the year on record.
During the U.S. session on Monday, Bitcoin fell as much as 6%, briefly falling below the $40,000 mark. For the year, bitcoin has fallen 14% for the year, its worst start to a year since 2012.
Fiona Cincotta, senior financial markets analyst at City Index, said:
“It’s a shocking start to 2022. There’s a lot going on, even though we know Bitcoin is unstable.”
The new crown epidemic has brought Bitcoin further into the mainstream asset industry. In the past 2021, many institutional investors have already started to participate in the cryptocurrency market. However, the recent “singing of the eagle” by the Federal Reserve has suppressed many risk assets, and Bitcoin is also among them.
Jay Hatfield, CEO of Infrastructure Capital Advisors said:
“Cryptocurrencies are likely to remain under pressure as the Fed tightens liquidity. Bitcoin could fall below $20,000 by the end of 2022.”
Noelle Acheson, head of market analysis at Genesis Global Trading, noted that Bitcoin’s plunge appears to be driven more by short-term traders than long-term holders. Long-term investors are “buying the dip,” her research shows.
Previously, many analysts believed that Bitcoin had a good chance of rising to $100,000 in the new year. But according to a JPMorgan survey of its clients, only 5 percent believe bitcoin will reach $100,000 by the end of 2022. Most people think Bitcoin will exceed $60,000.