Ecosystem analysts and commentators claimed that BTC would reach around $100,000 before 2023, highly encouraged by its 2021 Bitcoin sell-off.
The most valuable cryptocurrency on the market, Bitcoin, reached an all-time high in November 2021 of $69,000.
However, a few days and weeks later, we saw a slide begin to deepen, with Bitcoin dipping below $42,000 and losing a third of its value from its all-time high.
Bitcoin lost almost 10% of its lowest prices in three months, presenting a drop since September 2021.
Without a doubt, the cryptocurrency market has been very volatile; the magic strategy is impossible to predict, and many guarantees that it would continue to fall in price came to pass. Along with similar thinking grades, you can trade on https://bitcoin-pro.app/ to get deep and strong into the journey of virtual assets.
For this reason, future investors are encouraged to carry out their investigations and apply according to the risk they may acquire and the capital they may lose; Do not invest money you are not willing to lose.
Causes that led to the decline of Bitcoin in 2022
The most important thing about the high volatility of bitcoin is that it does not stop going up and down, but in 2022 after so many market convulsions, the question was gigantic.
How the market was moving based on the projections that many optimists had about what would happen to the price of Bitcoin. Unfortunately, traders did not know what to do at the time, and they had too much anxiety and despair to see the digital currency fall.
Some buy, and others sell bitcoins for short-term profit.
Uncertainty reigned on the table because the markets needed to set a clear pattern or direction to follow. In reality, many experts believed that it could fall below $40,000, forecasts that came true.
It is important to note that the United States Federal Reserve (FED) participated and was a crucial player in the collapse of the crypto-asset market due to the application of measures that would exclude the stimulus given in the pandemic and thus combat the high levels of inflation.
Although this announcement had a positive impact, causing the massive sale of cryptocurrencies, achieving a new rising value of close to $42,000.
Whenever a powerful state issues a decision that affects the country, it indirectly affects the value of cryptocurrencies; it is uncontrollable. Before this, users took the initiative to invest or withdraw their crypto assets, and the fluctuation began towards a cryptocurrency bear market.
High impact factors in the digital market
Although it is clear that currencies are going through moments of crisis, seeing a drop in levels and prices from the records reached at the end of 2021, a concern arises regarding the factors or causes of the fall of Bitcoin, finding the following:
- Futures were diluted, foreign exchange transactions fell significantly, interest in investments fell, and the number of accounts in movement fell too.
- In addition, Bitcoin kept wallets less and less fluid and on the desktop.
- The volume of Bitcoin transactions plummeted in a disposition in which the enthusiasm to invest was lost after the measures of the State.
- Absent accounts, in this case, the growth of active addresses, the level of activity, and operations, also stagnated.
- Traders buy and sell, while whales only buy. The term whale is an actor that controls a large part of bitcoin and therefore influences the price.
- Another factor could be the economic uncertainty caused by the war between Russia and Ukraine, and the following restrictions by the Fed led to the collapse of the crypto market.
Conclusion
Bitcoin is a virtual currency and one of the most widely used worldwide, which has caused a wave of uncertainty for investors and users, so you must be clear when investing; the risk you can run in the case of bitcoin is exponential.
2023 did not start as lucky for Bitcoin as everyone expected, although it did start with a slight rise in value.
In concerns about the general macroeconomic context, uncertainty, inflation, and confidence in exchange platforms continue to be the reasons that affect the digital market; In addition, many other factors can affect the ups and downs that the currency presents.
Although it is a complex scenario to be the beginning of the year, investors do not doubt that these are only passing phases that, like all the breaking points that have characterized bitcoin, each bearish trend leads to an upward trend, so they hope to prepare to receive the much-desired earnings at the beginning of the year.