The year 2022 has been very difficult for the crypto market. After the peaks of last November, we have seen consistent declines in cryptocurrencies.
This is happening for a number of reasons, both macroeconomic and within the sector. Bitcoin has already fallen to its 2017 peaks, and investors are wondering how deep the “bottom” is.
We take a closer look at the reasons why cryptocurrency rates are peaking. Have we already passed the bottom? Or are BTC’s price minima yet to come?
Reach out to the article and find out what are the most important factors affecting current cryptocurrency prices. Don’t follow your emotions when making decisions – this usually leads to a loss. Rely on the proven data we present.
Why are cryptocurrency prices falling?
BTC experienced its historic peak on November 9, reaching $67,549 (according to CoinMarketCap). Although many experts and commentators expected a so-called triple peak and an extension of the bull market according to the super cycle theory, nothing of the sort happened. We have seen declines in cryptocurrencies, which basically continue to this day.
Between November 2021 and the end of January 2022, the price of BTC fell to around $36,500. It is worth noting that this took place even before the outbreak of war in Ukraine and the strong rise in inflation globally.
The outbreak of the war itself did not drastically affect the price of BTC. However, the collapse of Luna in May has already had a clear impact on the price of all cryptocurrencies. From the beginning of May to the end of June, BTC fell to around $20,000.
The following months saw a long consolidation of the price, which settled in the range of $19,300 – $24,400. At the beginning of November, it seemed that the support at the level of $19,000 – $20,000 was very strong and BTC would finally rebound. However, on November 9-11 the crypto world was shaken by the collapse of the FTX exchange, which, as it turned out, was a blowout.
A huge part of its collateral was placed in low-liquidity tokens, which momentarily lost value. When this information came to light, not only billions of dollars in digital coins evaporated from the market. Along with them, the confidence of a huge portion of investors in centralized exchanges also disappeared.
Can bitcoin go below $10K?
The answer to the question of whether the declines in cryptocurrencies are about to end is very difficult. It will be influenced by a number of factors. At the time of this writing, BTC costs $16,518, but there is a sizable group of investors who are concerned about the cryptocurrency falling below the $10,000 level.
The last time we saw BTC at $10,000 was in October 2020, just before the sharp jump in value in November and December. What would have to happen for cryptocurrency declines to drive bitcoin to this level?
Bad macroeconomic data has been with us all year, so the market has already discounted the risks associated with it. We expect the cycle of interest rate hikes to end, and the first data on declining inflation in the US are encouraging.
However, it should be remembered that there is a case pending before the Supreme Court in New York against the publisher of the stablecoin USDT – the company Tether. Earlier, Corinne Kopf’s leaked content was discussed online.
It has been alleged that it does not have collateral in marketable assets for the stablecoin launched. If this turns out to be true and Tether loses the high-profile lawsuit, further declines in cryptocurrencies are inevitable. Thus, there is a threat that the price of BTC will fall below $10,000. However, it’s hard to say for sure and when this will happen.
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