• Mashum Mollah, CEO at Blogmanagement.io


• 28.11.2022 05:30 pm
undisclosed

Introduction

The weekend was gloomy as Bitcoin (BTC) was trading close to a recent price floor. With resistance at $17,250, bitcoin is currently trading marginally lower on

Saturday, below the 23.6% Fibonacci retracement line. One method of projecting the long-term direction of the Bitcoin price is to compare it to other significant technical advancements and trends.

The overall market capitalization of all cryptocurrencies on Sunday, November 20, 2022, is $821 billion, down 1.93% from the last day.

Why Did The Bitcoin Price Fall?

Bitcoin is one of the greatest Cryptocurrencies and the oldest one too. Therefore, it has stronger communities and more people waiting for its revival.

Platforms like bitcoin revival encourage Bitcoin enthusiasts to invest more in Cryptocurrencies and control the price of this great digital asset.

Given below are some reasons that are responsible for the fall of Bitcoin prices—

1. The Federal Reserve Policy In The USA

Wednesday afternoon is when the Federal Reserve is anticipated to announce another rate. Following earlier Fed rate rises this year, the price of bitcoin and other e-currencies dropped sharply.

The economy's uncertain future has hampered the cryptocurrency and stock markets, which have been increasingly correlated.

Historical price charts demonstrate a relationship between Fed rate increases and declines in the cryptocurrency market.

The stock market and cryptocurrency have a strong correlation. The crypto market was already in "crypto winter" and was shaken by several events, including the Fed's interest rate increase in June.

Since the peak of the bull run last year, the price of bitcoin and Ethereum has dropped by more than 70% in June.

Experts closely watch Bitcoin, e-currencies, and the larger crypto market for "a possible retest of the June lows."

2. The Effect Of Market Supply

There is a fixed quantity of 21 million Bitcoin, the largest cryptocurrency. However, according to current circumstances, it will be completely depleted in 2140.

Some claim that fixed supply, like Bitcoin's, leads to digital scarcity. Prices may rise due to rising demand resulting from the lower supply.

Divisibility will be a key element in maintaining healthy supply levels. Nakamoto reasoned that the eight decimal places in this currency would ensure that minor purchases could still be made.

Research stated that 3.8 million Bitcoins had already been lost by 2017, more than a year ago.

3. The Liquidation Effect

Generally speaking, liquidation provisions are specified in the terms and conditions of both local and international exchanges.

Platforms use liquidations as safety valves to safeguard themselves or recover losses when the price of collateralized crypto assets declines below a certain level.

Due to these forced transactions and the notion that they "lost" their money, some people could think that they qualify for some tax relief. However, you make a profit when you sell your crypto assets after keeping them for more than a year.

For instance, you would be required to pay capital gains taxes on $40,000 if you bought 1 BTC for $10,000 and sold it for $50,000 in 2022. Tax rates for long-term capital gains range from 0% to 15% to 20%.

4. Sentiment

The Bitcoin network has attracted the attention of potential new investors on social media. According to Google Trend statistics, the increased social volume has aroused the general public's interest and led to individual searches for bitcoin.

The number of references and mentions of bitcoin on social media is related to the public interest in bitcoin and may have affected public decision-making around investments. In addition, because they can influence bitcoin's price, whales are crucial to market activity.

The overall number of whale transactions exceeding $100,000 and $1,000,000 increases during rallies and decreases during declines, as seen in the accompanying graphs.

Except for the panic sale during the COVID-19 epidemic, the charts show that whales are more active during uptrends and less active during downtrends.

Can The Greatest Cryptocurrency Recover?

Forecasts for the bitcoin price indicate that it will rise by $818.25 the following week, hitting $16,862.36 on November 28, 2022.

The original cryptocurrency, Bitcoin, has a promising future in terms of price growth and value-to-value ratio. Analysts forecast a price increase of around $500,000 per coin in 2025 and a price increase of $1 million in 2030.

There has not been any movement in Bitcoin because it's been stuck below $17,000 for days. This negatively impacts the alternative currency, with Ether battling to hold over $1,200.

According to the International Monetary Fund, the cryptocurrency market now swings more in lockstep with the stock market than it did in the past.

The Hope Of The Future

Even if they are declining much slower than in the first half of 2022, Bitcoin and other cryptocurrencies are still on the downward path. So investors may buy today when prices are low if they think a certain cryptocurrency has the potential for long-term development.

As this most recent crypto winter ends, many currencies will probably disappear. However, supposedly "blue-chip" cryptocurrencies like bitcoin are more likely to survive the storm. According to some analysts, bitcoin may reach $100,000 before the year ends.