Why bitcoin has plummeted in price. And what will happen to the cryptocurrency next

Why bitcoin has plummeted in price. And what will happen to the cryptocurrency next

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Author: Robert Strickland
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Why bitcoin has plummeted in price. And what will happen to the cryptocurrency next
Price of bitcoin updated the local minimum at $21.3 thousand. Reasons for the current decrease in the rate of asset and its prospects in the near future

  • What happened

Bitcoin rate at the crypto exchange Garantex fell to $21.3 thousand on February 13. The cryptocurrency updated the minimum since January 20, after which its price partially recovered. As of February 14, 9:35 a.m., the asset was trading at $21.7 thousand, it has fallen by 0.5% over the past 24 hours.

Bitcoin set a five-month high of $24.25 thousand on February 2. After that, it started to decline sharply, losing more than 12% in value in 11 days.

  • Why bitcoin fell in price

Technically, bitcoin is due for a correction after four weeks of growth. He recalled that last week, the correction was also observed in the S & P 500 index. The news background on the crypto market was negative.

The Securities and Exchange Commission (SEC) has recently shown increased interest in the cryptocurrency market: the ban on steaking at Coinbase and Kraken, and problems at Paxos and Binance (recognition of BUSD as security). Banks start to shun crypto-companies (Silvergate stops working with Binance).

  • What is the trend in the market?

Globally, bitcoin remains in a downtrend or is in a "sideways" trend, the expert believes. According to him, the cryptocurrency needs to consolidate above $25,000 for the ascendant trend to take place.

Despite the latest decline, bitcoin has risen significantly in 2023. On January first, the cryptocurrency was trading at $16,500, which translates to an increase of up to 32% by now.

  • When could bitcoin return to growth?

Bitcoin price can turn around at any mark, but it is worth paying attention to the local support levels of $20,500, $18,500 and $16,000, with global support zones located below the six-month lows - at $14,000, $12,000 and $9,200.

The price of the asset tends to stop when falling, falling to a certain level (support level). In its turn, the price stops growing when the rate rises, reaching the so-called resistance level. In both cases, once the movement stops, the price can turn around.

  • Negative factors

Bitcoin quotes are negatively affected by too much pressure from regulators on crypto-companies in developed countries, Nazaruk explained. He added that the possible insolvency of big market participants in the conditions of liquidity cuts will also aggravate the situation.

The main macroeconomic factor could be the onset of the recession. The expert is sure that this could bring down the market at a moment's notice.

  • Positive factors

Investments in crypto-industry, soft regulation, and easing of monetary policy of major central banks will positively influence bitcoin quotes

If there is a recession after the central bank recognizes it and launches a stimulus program, the market can be expected to grow, the expert said. He called it a transition of markets from the strategy "Risk off" to "Risk on. 

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