People familiar with Bitcoin trading are well aware of its bearish market conditions and its high degree of volatility.
Bitcoin currently trades at around US$19,000 and has declined over 70% from its all-time highs in November 2021. BTC has an actual resistance level of US$20,000 while its 100 hourly simple moving average sits there too. Experts believe the momentum of BTC could weaken if it fails to breach the US$20,000 resistance level or 100 hourly Simple Moving Average (SMA). Although cryptocurrency prices tend to find support near US$22,000, its price has repeatedly rejected this level and may fall to as little as US$18,000 should further losses occur. Bitcoin had long been seen as an indispensable store of value that was immune from economic and financial market fluctuations. No longer is that true; today, economic events have an enormous effect on Bitcoin and the cryptocurrency market as a whole, thanks to inflation’s decreased importance, stock markets’ volatility, and Federal monetary policy changes having far fewer influencers. Bitcoin traders are no strangers to bearish market conditions and their inherent volatility, yet investor support for its pricing continues to diminish due to an inability for it to produce profitable outcomes. This article lists 10 reasons why the price will fall and suggests it could reach bottom before 2022 is complete.
The World Is Gloomy.
The world is in disarray. Many cities across mainland China, including Shanghai, are currently caught up in an anticorruption crackdown, which is negatively impacting companies around the globe. Furthermore, Russia-Ukraine war is costing billions and further complicating matters.
Governments Are Taking Harsher Positions On Crypto.
More than 40 nations, such as China, have either banned crypto outright, blocked banking access to its ecosystem, or outlawed cryptocurrency exchange. This is one of the primary factors behind Bitcoin price decrease and why its bottom may come sooner rather than later.
The Indian Government Is Against Cryptocurrencies.
Starting July 1st, a flat 30% tax will be levied on cryptocurrency profits without deducting losses, plus an 18% GST fee will also be collected from amounts paid out as taxes. Although crypto remains officially unrecognized by India’s government, this new regulation has had serious ramifications for its growing crypto community.
The Experiment In El Salvador’s Failing.
One reason for Bitcoin price decrease and why it will reach rock-bottom by 2022, in one of the first countries that legalized digital currency, was due to no interest accruing on their bond investment.
There Will Be Crypto Exploits And Scams In 2022.
These exploits and scams (Ronin inflicting $615 million of losses, Solana Wormhole $326 million losses, Beanstalk flash loan attack of $181 Million causing another loss, Qubit causing $80 Million) are damaging investors as well as discoloring sentiment.
Investors Are Using Too Much Crypto Leverage.
CryptoQuant data firm recorded an unprecedented spike in BTC leverage ratio during January, signalling more investors were taking risks within the crypto space. Much like traditional markets, cryptocurrency investors often use debt financing for futures purchases; with Bitcoin’s price set to reach rock bottom before 2022 ends being one reason behind its fall.
The Hype Around Nfts Is Dying Down.
Plagiarized works, fake collections, spams, frauds, rug pullers and wash trading have contributed significantly to Bitcoin’s declining price. Before 2022 ends, its price will reach its absolute minimum due to this phenomenon.
There Is Not Enough Liquidity In Cryptocurrency Markets.
Leveraged investors often sell off a significant portion of their assets through leveraged investing, leaving fewer buyers eager to purchase coins sold through stock exchange. This often causes cryptocurrency markets to collapse over the weekend as more coins are sold than buyers are available for them; when large quantities are sold off there are often no investors tuned in who want to buy them back again.
Terraform Labs Just Sold All Its Bitcoin For $1.3 Billion.
Terraform Labs, the creators of UST, LUNA and Luna Foundation Guard has had an enormous selling pressure that has brought down the entire cryptocurrency market and caused its price to plummet, possibly reaching rock bottom before 2022 is out.
The Hype Around The Metaverse Is Dent.
ApeCoin prices spiked following Yuga Labs’ announcement of Bored Ape Yacht Club NFTs being up for sale on Otherside Metaverse; however, as these land NFTs were sold at a flat rate of 305 ApeCoin tokens per plot rather than through auction-style sales, ApeCoin prices began declining again.