Over the past 24 hours, BTC slumped by more than $2.500.
After the fall recorded on Monday, quotations of the first cryptocurrency continued to decline amid political tensions between Russia and Ukraine. According to CoinMarketCap, Bitcoin (BTC) dipped below $36.500 on the morning of February 22. The daily drop was about 7% during those moments. As of 2 p.m. (GMT+2), the first cryptocurrency has regained some positions and is trading around $37.600.
Overall liquidated positions exceeded $390 million over the last 24 hours, as reported by Coinglass. The total market capitalization declined by more than $100 billion at its peak. All altcoins from the top 20, excluding stablecoins, were in the red zone.
We asked experts to share their opinion on the market situation. Dmitry Kudinov, an expert in digital asset mining and founder of the EMCD mining pool, gave his thoughts on the reasons for the ongoing dynamics and possible prospects:
“No single factor seems to be responsible for the current decline. It’s a set of factors and a change in market sentiment, respectively. The crypto market began its fall in November 2021 after Bitcoin renewed its all-time high above $69.000. Since then, financial markets have seen many events, such as a record 40-year increase in consumer inflation in the U.S. This is worth considering as one factor, because the U.S. Federal Reserve decided to roll back its stimulus program in response to rising inflation, which led to a massive outflow of capital from risky assets.
My short-term forecast is a crypto winter, followed by new levels after the next halving. The U.S. Federal Reserve will roll back its stimulus programs according to the January 22 FOMC meeting minutes. Investors will begin to massively withdraw from high-risk assets, including Bitcoin.
The new wave of growth will start after the halving and, at the same time, will end for investors with small capital, as entry into cryptocurrencies after the halving will be more costly. After halving, we will be able to see again such growth of Bitcoin rate, which nobody, once again, believed in. The price of BTC may exceed $400.000.”
Ivan Kibalchich, Yosu CEO, expressed an alternative opinion:
“One of the factors affecting the quotations of cryptocurrencies is one of the highest ever levels of correlation with classical markets, first of all — with the S&P 500 index. Markets are significantly influenced by a geopolitical situation and statements of the Federal Reserve to raise the key rate.
Short-term, the local minimums update is possible, i.e. the fall of BTC quotations to the area of $30-32.000 and even a false break-down of $30.000 is possible but so far, it looks like a correction but not like the change of the trend. Correspondingly, the correction may be followed by a new maximum by the end of the year.
Among the main factors we rely on while analyzing the situation, there are different technical analysis indicators and additional signals, including ATH on Bitcoin hash rate, accumulation of positions by whales and news. Still, the news explains the price movement, but they are not the reason for it.”
