Bitcoin price and the broader cryptocurrency industry have continued to experience a mind-boggling downturn with the global digital currency market capitalization plunging to $1.89 trillion, down from about $2.9 trillion when Bitcoin (BTC) attained its all-time high (ATH) above $68,789.63 earlier in November 2021.
The days of massive price gains seem to be eluding the market as a bearish sentiment encamps around all major digital currencies at the moment. While Bitcoin opened the new year on a semi-neutral growth level, expectations mounted that big institutional investors must have sold off some of their holdings in a bid to balance their books for the year.
These analyses or projections were wrong as Bitcoin has continued on its freefall course. While the premier digital currency is changing hands at $40,911.42, it dropped to a 90-day low of $39,796.57 today as the market plunge takes a new momentum. Following this massive plunge below the psychological level, Bitcoin bulls appear to have regained their balance and helped push the coin’s price back above the line of hope.
Bitcoin and its Price Dip Factors
Several factors are responsible for the ongoing depression in the price of Bitcoin and the broader digital currency ecosystem as a whole. For one, the upcoming Federal Reserve meeting is billed to see market drivers expedite the reduction in the US balance sheet as regards bond purchases.
This economic policy is billed to be followed by an increase in interest rates, a move that is billed to be disadvantageous to Bitcoin which is a goto asset for investors based on its potential rate of growth.
Following the recovery from the Chinese crackdown last year, the price plunge in the broader digital currency industry can also be attributed to the civil unrest in Kazakhstan. Based on these local troubles, the government shut down the internet, sending miners offline, a move that has stirred a plunge in the Bitcoin mining hashrate, thus unsettling the industry as a whole.
Bitcoin is known to have survived massive price plunges in the past and this will certainly go down as one of such historic moments. The digital currency is now in its buy zone as its Relative Strength Index (RSI) is pegged at 33.64 at the time of writing according to data from TradingView.
Just as the coin has recovered from its lows in the past 24 hours, more recovery is expected in the coming days, albeit, with intermittent corrections.