The bitcoin price fell below $44,000 immediately after the Federal Reserve’s December FOMC meeting notes re-confirmed efforts to regulate the balance sheet. Bitcoin (BTC) and the wider cryptocurrency market tumbled after minutes from the Federal Reserve’s December FOMC meeting. This indicated that the regulator is committed to decreasing its balance sheet and rising interest rates in 2022. Meanwhile, stock markets pulled back after the closing bell. BTC’s price dropped below $44,000 as stock markets fell. It triggered a wave of liquidations totaling $222 million in less than an hour.
According to data, Bitcoin took a hit from a wave of selling that pushed the price to an intraday low of $43,717. According to the present position, the Fed should begin raising its benchmark interest rate in March, “which would indicate that balance sheet reduction might begin before summer.”
Analysts Predict
Crypto expert and pseudonymous Twitter user Rekt Capital provided a forecast of the Jan. 5 fall with the following chart emphasizing the “many parallels between this BTC range and May 2021.” Analyst and Cointelegraph writer Michal van de Poppe provided a more in-depth look at the price movement from May, demonstrating how BTC performed during the previous strong market slump. He mentioned: “On Bitcoin, the scenario of a dip below $46K is playing out. Will we be sitting around here, taking the liquidity, and breaking back over $46K? The bottom line is that situation.”
Suppose, the price does not break back over $46,000. In that case, the market may be in for a prolonged bear trend. BTC might retrace to the low $30,000 region. The whole cryptocurrency market capitalization is currently $2.123 trillion, with Bitcoin commanding a dominance rate of 39.4 %.
