Cryptocurrency prices are definitely starting the year 2022 in a rather freezing atmosphere. The United States Federal Reserve confirmed yesterday that it plans to raise interest rates sooner than expected, plunging the stock market and cryptocurrencies like Bitcoin (BTC). Zoom in on this lightning drop.
Bitcoin (BTC) and altcoins prices fall
The vast majority of cryptocurrencies are in the red over the last 24 hours . The course of Bitcoin has lost -7% on the day, Ether (ETH) fall meanwhile -9% and Binance BNB loses -8%. The fall was particularly clear in the evening of yesterday, the BTC coming to touch the 42,600 dollars:
The price of Bitcoin has plunged since yesterday – Source: TradingView, BTC / USDT
In the top 20 most capitalized cryptocurrencies, drops over 24 hours are between -3% for the LINK of Chainlink, and -11% for the DOT of Polkadot and the SOL of Solana.
The dominance of Bitcoin is also at the lowest since 2018: it only represents 37% of the total capitalization of cryptocurrencies. , against an ETH which remains at 19%.
How to explain this fall?
Bitcoin and altcoins tumble in what appears to be a reaction to two news items. On the one hand, the United States Federal Reserve, which announced yesterday that it may have to raise interest rates earlier than expected , in order to try to control inflation that it considers too high .
The American central bank wishes more quickly to put an end to the support measures it had provided to the economy to deal with the Covid-19 crisis. In reaction to this news, the Dow Jones and the S & P500 fell … apparently dragging with them cryptocurrencies, which remain correlated to equities at the start of the year.
The other possible interpretation is an influence of the situation in Kazakhstan , which is going through upheavals at the moment. The country is second in the world in terms of hashrate produced. However, it has just experienced a massive Internet shutdown, in a context of particularly tense social crisis.
As a result, Bitcoin’s hashrate fell more than 12% , which may have swayed its price drop, and dragged altcoins.
All of this seems to have helped push cryptocurrency prices down. Is the resumption of the “bull run” possible, or are we heading towards a bear market phase ? Analysts don’t all agree on the subject, but one thing is certain: the psychological threshold of $ 40,000 will be crucial if it is crossed again by Bitcoin.
