Since the end of last year, Bitcoin (BTC) has been consolidating between $ 45 thousand and $ 50 thousand for a long time, but with the arrival of 2022, Bitcoin began to be priced around $ 42 thousand.
Bitcoin slumped below the $40,000 level on Friday, January 21. While Bitcoin, which gained momentum on the downside, regressed to the band of 35 thousand dollars, the total value of the crypto money market suffered a loss of 500 billion dollars.
Monetary Policies of the US Federal Reserve
Among the most important factors behind the sharp loss of value in Bitcoin are the expectations of the new interest rates to be announced by the US Federal Reserve (Fed). Because the highest inflation levels in the last 39 years were seen in the USA, and the Fed will announce interest rates at the FOMC meeting on January 25-26. Experts expect the Fed to increase interest rates 3 or 4 times in 2022. The way the Fed will follow in monetary policies and the expectations formed are reflected in the crypto money markets with decreases.
Correlation Between Stock Markets and Cryptos
Experts point to the increasing correlation between stocks and Bitcoin as a factor in the declines in Bitcoin and the crypto money market in general. According to experts, Bitcoin is more intertwined with the stock markets due to ETFs and institutional investors, and experts say that the cryptocurrency market is moving with Wall Street. When we look at the markets, it is seen that there are decreases in the shares of PayPal, MicroStrategy, Block and even Netflix.
"Ban" Request by the Central Bank of Russia
Recent strong factors cited by experts in the sharp declines in cryptos include the Central Bank of Russia's request to impose a comprehensive ban on cryptocurrency trading and crypto mining. As it will be remembered, the Central Bank of Russia likened Bitcoin to a pyramid scheme and claimed that this "fraud" system should be banned immediately. The combination of these 3 strong factors also deepened the sharp declines in the market, according to experts.
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