The beginning of the year was sad for Bitcoin. Bitcoin price forms the fifth bearish candlestick in a row. At first, the price of Bitcoin dropped below $47000, then it fell below $45000. Today the BTC/USD pair is trading below $43000.
As a result of the prolonged decline, the price of Bitcoin collapsed to its lowest levels since the beginning of December. On some trading platforms, during Asian trading, Bitcoin fell to $42500.
The analyst speaks of two factors that triggered the current Bitcoin price crash. First, there were rumors of a Fed interest rate hike and balance sheet cut in 2022. The Fed is expected to start raising its rate in March, which would mean that balance sheet contraction could begin before the summer. This triggered a correction in the stock market and the cryptocurrency market.
Another factor that influenced the price of Bitcoin was Internet outages in Kazakhstan. As a result of the migration of miners from China to the USA, Kazakhstan and Russia, these countries turned out to be the leaders in the miner rating. However, due to massive protests in Kazakhstan and the shutdown of the Internet, the BTC hash rate has collapsed to a minimum since the middle of last month. Mining pools using the infrastructure of Kazakhstan faced big problems. The worst hit of them were 1THash, OKExPool and KuCoinPool. Their capacities collapsed by 82%, 46,3% and 22,7%, respectively. If miners fail to resume normal work in Kazakhstan in the coming weeks, they will be forced to migrate to more comfortable regions.
Technically speaking, Bitcoin’s short-term outlook indicates a deeper correction. Bitcoin price could drop to $40000.
Support level 45600 was critical. And a decline below that level sent the price below the descending triangle. If the current Bitcoin price correction continues, the price could reach the mark of 40000.
If the BTC/USD pair does not manage to get back above 46000 any time soon, it will mark the beginning of a protracted bear market.