Bitcoin has not had a good start to 2022. BTC came as a huge shock, dropping 45 percent from its all-time high. Matt Hougan, chief investment officer at crypto asset manager Bitwise, and David Lawant, director of research, have released a new report. The authors point to market sentiment as the driving force behind the crash.

According to the Bitwise report, even if fundamentals remain strong, the negative mood in the market is pushing Bitcoin price down.

   "The market looks set to continue to experience volatility in the short term as macroeconomic challenges persist, but our experience from past corrections makes us optimistic about the long-term outlook."

According to the report, over the past three months, the most important reason for the decline in the crypto market is the large change in risk perception and investor sentiment in the stock market, tech stocks and crypto market due to FED policies. The emerging consensus that the Federal Reserve will soon begin tightening its monetary policy to combat inflation is cited as the main reason for this pessimism.

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As a result of this shift in sentiment, the Nasdaq Composite Index fell more than 10 percent from its November 2021 peak, and many tech stocks fell 20 percent or more. Bitcoin also took a big hit. According to the report, the latest sales are similar to the last quarter of 2018, when the market was hit by a more hawkish Fed. At that time, the Nasdaq Composite Index fell 18 percent during the quarter, and the Dow and S&P 500 suffered their worst December since the Great Depression. Bitcoin fell 44 percent in the same quarter. While weak sentiments are the most likely force triggering the recent pullback, crypto's fundamentals are solid.

Execution Order Coming For Pripto Coins

The world is turning its attention to the impending executive order by the Joe Biden administration of the USA. Seven critical articles stand out about the Joe Biden administration's executive order. President Joe Biden is drafting an executive order to set policies and regulate cryptocurrencies in the United States. The directive is expected to be published as early as next month. There are no specific details yet, but the previous activities of the Joe Biden crypto administration suggest that the government is serious about regulating the industry, as authorities view the asset class as a tool used by criminals to finance illegal activities. This is a development that will affect the Bitcoin price.

Federal agencies will be prompted to discuss the risks and opportunities posed by cryptocurrencies. The Fed's advice will be combined with guidance from the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC) and the Office of the Currency Supervisory (OCC) to improve executive order. Senior officials of the Joe Biden administration have met several times to discuss and finalize the details of the executive order, and a report to Biden is expected within a few weeks. The executive order will put the White House at the center of regulating Bitcoin and other cryptocurrencies in the United States.