Cryptos get a beating
Bitcoin widens crash
01/23/2022, 11:28 am
Bitcoin has halved in value since November. The other cryptocurrencies currently only know one direction: down. Bitcoin remains in the danger zone, says a foreign exchange specialist.
Cryptocurrencies are going down again. Bitcoin falls four percent and is now hovering around the $35,000 mark. This means that the world’s largest and most well-known cryptocurrency is worth almost half as much as it did in November, when it hit its previous high of $69,000. Ether, the coin linked to the Ethereum blockchain network, meanwhile fell 6.7 percent to $2396.
US monetary policy is currently putting a significant strain on risky investments such as digital assets. It is expected that the US central bank will soon react to the high inflation by raising interest rates. The Fed itself has so far signaled three hikes for this year, and four or five steps are expected on the financial markets.
Rising interest rates are usually poison for risky asset classes, which include Bitcoin and other cryptocurrencies due to their sometimes extreme price fluctuations. Because rising interest rates make other forms of investment more attractive. On the other hand, they dry up liquidity on the market – risky investments in particular also suffer from this.
Bitcoin is falling as crypto traders risk-averse after “the stock bloodbath” and ahead of next week’s Federal Reserve meeting, wrote Edward Moya, an analyst at currency data services provider OANDA. Bitcoin remains in the danger zone. There is currently not much support up to $30,000.