Bitcoin has slipped by 15 per cent over the last week and that made the market to enter a period of “extreme fear”, according to the indicators.
The price fall coincides with a broader downturn across global financial markets brought about by geopolitical crises and caution over concerns that the US Federal Reserve will tighten monetary policy and increase the rates in USA.
Bitcoin briefly dipped below $40,000 on Monday evening but has since returned and appears to have stabilised just above it. The price point could prove a key area of resistance over the coming days, according to some analysts.
“The prospect of more interest rate hikes and increasing concerns over the economic environment may become recurring themes for this year. As is the case with the stock market, we may see more outbreaks of episodic volatility in the months to come.”
“Bitcoin is still in the upper half of the range it has traded in 2022, meaning if it can hold its level above $40,000, then confidence could return to the market,” said Simon Peters – analyst at the online trading platform eToro.
“What is clear is the ebullience of the past few weeks led to the token being overbought, and is now suffering the consequences of that… Unlike in past years, nothing of serious note [at Bitcoin 2022] seems to have buoyed the price this time around.”