The crypto market is still in a sideways trend, with Bitcoin selling for $41K. The price of ETH is currently hovering around $3.7K, and most cryptocurrencies are following in BTC’s footsteps. Bears continue to hold the upper hand in the market’s downward spiral.
The price of bitcoin has plunged below $42k, a new four-month low. As retail buyers appear to be panic selling, the market attitude has swung to the negative. Analysts predict a $40K price bottom, but it hasn’t stopped whales from stockpiling more Bitcoin amid the market’s turmoil.
Bitcoin Price Downtrend Continues!
According to Mike Novogratz, a well-known crypto investor said on recent CNBC’s Squawk Box show that Bitcoin would certainly go below $40k and hit a new bottom below $38k before resuming its upward trajectory.
Novogratz said, “I’m aware of large institutions that are in the process of filling positions.” “They’ll think they’re interesting levels to buy.” “The bottoming points on the charts appear to be $38k and $40k.”
Over the previous month, the price of bitcoin has been steadily declining. The BTC price has dropped by more than 40% since reaching an all-time high of $69,000 in November. During the last decade, significant price corrections have always been a part of Bitcoin’s price volatility.
The Federal Reserve’s monetary policy is being tightened
Most asset classes have been rapidly dropping after the Fed’s pronouncement on Wednesday. Investors are flocking to safe-haven assets in response to the Fed’s determination to tighten monetary policy sooner than expected. Novogratz continued, “
"We are about to undergo a paradigm change, right?” some part of each of us, every single investor out there, has to be thinking. We’ve been convinced that the Fed will keep interest rates low indefinitely, gradually raising them to 2% over the next two years while continuing to buy Treasuries. As a result, we’re experiencing a liquidity crisis.”
Consumer inflation rate in the United States has reached an all-time high of 6.8% in 2021. As a result, the Fed may be forced to take even harsher measures to keep the economy in check. However, according to Novogratz, there is no need to be concerned at this time. He also stays bullish about getting involved with institutions.
“Last year, cryptocurrency had a terrific year. It’s difficult to believe you’ll continue to grow indefinitely. It’s a complete 180-degree turn. On the sidelines, we’re seeing a lot of institutional demand. In the medium run, I’m not concerned.” He went on to say a few more things.
Members’ desire for a faster rate hike path and a reduction in the bank’s $8.8 trillion balance sheet was revealed in the Fed’s December meeting minutes. The Nasdaq 100 index has been dragged down in recent days by fears of tighter monetary policy dimming the attraction of risk assets like bitcoin and highly valued technology firms.
Source: https://coinpedia.org/bitcoin/bitcoin-correction-is-not-over-btc-price-set-to-test-the-38k-low/