This was the worst weekly performance of Bitcoin
Following a sharp drop in prices, the Bitcoin market saw its worst weekly performance in eight months. Experts now believe that the price must remain below the $37,400 level to continue the downtrend in the long run.
Everything you need to know about Bitcoins
According to Quinn Desk, after the sharp fall in the price of bitcoin and digital currencies, the market was able to stabilize its position to some extent yesterday.
A Countdown to Tuesday's Fed Meeting: Deeper decline or price recovery?
Bitcoin, meanwhile, recorded its worst weekly performance in eight months.
Bitcoin is currently hovering around $35,000 and the price has remained almost unchanged in the last 24 hours.
According to data from the analytics platform Coinglass, over the past three days, more than $1.5 billion of Bitcoin trading positions have been in liquid derivatives markets.
Bitcoin has lost about 18 percent of its value in the last seven days, the largest drop since May 2021, when China banned cryptocurrency mining and trading and Ilan Mask tweeted about stopping bitcoin acceptance for Tesla product sales.
cryptocurrency traders appear to be influenced by the US Federal Reserve's decision to implement contractionary monetary policy, a trend that has given way to expansionary policies since the outbreak of the coronavirus worldwide and the turmoil in the United States.
A contractionary monetary policy is a way to slow down economic growth and inflation, which mainly affects the economy by raising bank interest rates and reducing the balance sheet of the central bank.
In contrast, there is an expansionary monetary policy in which the central bank lowers bank interest rates to accelerate economic growth.
Low bank interest rates encourage clients of financial institutions to receive loans, and as a result, the money supply increases significantly, an issue that could eventually lead to higher prices for goods and services, resulting in higher inflation.
The US Federal Reserve monetary stimulus, which includes the printing of trillions of dollars in cash, is considered to be one of the most important factors influencing the jump in bitcoin prices in 2020 and 2021; the leap ended with the price reaching a record of $69,000.
The recent drop in prices has pushed the value of bitcoin to half its previous historical high, an issue that reflects the intensity of price fluctuations in the digital currency market.
David Duong, the senior researcher at Kevin Base, America's largest exchange, recently said:
- One of the factors driving the cryptocurrency market over the past two years has been the increase in monetary stimulus following the turmoil in the economy during the Corona epidemic, a process that is coming to an end.
- Katie Stockton, founder of the Fairlead Strategies think tank, said the fall in prices over the past week had apparently had an "emotional burden".
Since such fluctuations are common, we will have to wait for confirmation and the closing of the price candle below the $37,400 range to take a long-term bearish position.
- El Salvador's President, Najib Abu Qila, who said a few days ago that he had bought 410 bitcoins worth $15 million during the recent fall in prices, said "some traders are selling their assets at very low prices," a price that had never been seen in the market since July 2021.
- While the anxiety caused by falling prices has affected many traders, one of Reddit's humorous users likened the weekly Bitcoin market view to the face of Pikachu, one of the main characters in the Pokémon animation.