Bitcoin’s price fell below $20,000 over the weekend, its lowest level since December 2020, following the Federal Reserve’s decision to raise interest rates by 0.75 percent and a week of declining value. Bitcoin has surged back beyond $20,000 by Monday, rising about 6% in just 24 hours.
The leading cryptocurrency has been trading in a narrow range between $19,000 and $22,000 for the past week, as crypto and stock markets have struggled to regain any substantial upward momentum following a broader sell-off. The ongoing conflict in Ukraine, as well as inflation reaching a new 40-year high, are cited by experts as factors for the stock and crypto markets’ price falls.
Experts claim that in recent months, the crypto market has been closely tracking the stock market, making it even more tied to macroeconomic issues. Ethereum, in a similar vein, has taken a similar path.
If bitcoin’s price goes below $20,000, according to Edward Moya, a senior market analyst at foreign currency firm Oanda, things could get a lot worse.
Now that bitcoin has fallen below $20,000, Moya believes that support will not arrive until the $17,000 level. “Another crypto meltdown in the summer of 2019 could see major support only around the $14,000 level.”
Bitcoin hasn’t surpassed $50,000 since December 25, 2021. Despite the ups and downs, Bitcoin’s price has fallen almost 70% from its all-time high of $68,000 on Nov. 10, owing to growing inflation, a sluggish labor market, and the Fed’s continuous warnings that it will begin winding down monetary stimulus measures.
The price of bitcoin has ranged between $19,000 and $22,000 so far this week.
Despite a poor start to the year, Bitcoin started 2022 on a high note, with a strong November and early December that gave way to the recent downward trend. Bitcoin grew significantly throughout the year, reaching an all-time high of $68,000 on November 10th, after beginning the year at $30,000.
Despite a significant dip from its recent all-time high, many experts believe Bitcoin’s price will eventually rise above $100,000, describing it as a matter of when rather than if. Ethereum’s price exceeded $4,850, a new all-time high, just after Bitcoin’s most recent all-time high in November. Ethereum has experienced comparable volatility since its recent high.
In April, Bitcoin reached $60,000 for the first time in 2021, and the price movement since then has emphasized the cryptocurrency’s unpredictability at a time when a growing number of people are interested in participating. Between a low point in July, when it fell below $30,000, and its most recent high point in November, Bitcoin swung swiftly up and down. According to analysts, the future of cryptocurrencies will almost probably include a lot more volatility.
As a result, we’ve spoken with financial advisors and investing experts who advise against investing a big amount of your portfolio in the asset class. They assist with clients to make sure that unpredictable cryptocurrency investments don’t get in the way of other financial goals, including as saving for an emergency fund or paying off high-interest debt.
