The Bitcoin price had to accept another downward slide and fell below the $ 40,000 mark. Bitcoin price had previously surged above $43,000 and then suddenly plummeted sharply down to a current price of $ 35,000. What were the reasons for the rapid descent in the last few hours? Let’s talk about 3 probable causes for this Bitcoin crash 2022.
#1 Bitcoin Crash 2022 – Failure to Break 43K level
The Bitcoin price briefly rose above $43,000 yesterday. However, the joy was short-lived. The price dropped again particularly quickly. First, it went down to $41,000 where a brief consolidation occurred. When it appeared that the support level wouldn’t hold, the price fell below $40,000 again.
#BTC
Bad news, support did not hold and the confirmed reversal is in full force.
In hindsight this would have been a great short. pic.twitter.com/x2HNBpn1yf
With the short “fakeout” the resistance at $43,000 could not be broken again. Investors reacted with sales. At the end of December, the upper resistance at $52,000 could not be broken and Bitcoin then experienced the next crash at the beginning of January.
#2 Tighter Monetary Policies in the US
The US Federal Reserve’s plans to raise interest rates are having a major impact on the weak Bitcoin price. More and more speculative investors seem to be withdrawing from the markets at the prospect of higher interest rates. The most important cryptocurrency has benefited greatly from the low-key interest rates in recent months.
The increase in key interest rates will ensure a different monetary policy in the coming months. Like other assets, Bitcoin first has to adapt to the new circumstances. With the launch of various BTC financial products on the stock market, the cryptocurrency is entering an important adoption phase this year. The setbacks are therefore not surprising.
#3 New Bans and Regulations
Bitcoin has to deal more and more with regulations in other countries. Currently, Russia wants to ban cryptocurrencies.
Due to the sharp increase in the proportion of institutional investors in 2021, Bitcoin will be hit harder and harder by such regulations. It remains to be seen whether the cryptocurrency will become more immune to such new bans and regulations in the future or whether it will simply adapt more.
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