Bitcoin (BTC) dropped below $42K for the first time since September 2021 as the market remains in the red.
The leading cryptocurrency was down by 2.92% in the last 24 hours to hit $41,733 during intraday trading, according to CoinMarketCap.
This represents a 39.5% decline from the all-time high (ATH) price of $69,000 hit in November last year.
A wave of protests erupted in Kazakhstan due to high energy costs. As a result, the nation’s administration imposed a countrywide internet shutdown to tame the unrest, prompting BTC miners to shut down their operations.
Therefore, the Bitcoin mining hashrate has slipped by 19.6% from the peak of 229 EH/s recorded on January 1 to the current 184.25 EH/s, according to data analytic platform Coinwarz.
Kazakhstan has become the second-largest BTC mining hub after the United States, following the mass exodus of miners from China in May 2021.
The slump in Bitcoin price is also attributed to the U.S. Federal Reserve plans to raise interest rate in March.
Therefore, there is a great probability that the Fed will raise interest rates this year amid greater discomfort with high inflation. As a safe-haven asset with high inflation, Bitcoin fell below $44,000 immediately after the announcement, and the price continues to nosedive.
The significant liquidation in the crypto market has sent the market cap below $2 trillion as it sits at $1.96 trillion, according to CoinMarketCap.
Meanwhile, market analyst Michael van de Poppe believes that Bitcoin needs to reclaim the $46,000 level to realize an upward momentum. He stated:
“Might be a scenario for a reversal on Bitcoin. In that case, bullish divergence seems to be created (another scenario is a fast recovery above $46K, that’d be a signal too).”
With El Salvador President Nayib Bukele disclosing his bullish forecasts that Bitcoin price could reach $100,000 this year, it remains to be seen how the top cryptocurrency will play out.
However, Goldman Sachs analyst Zach Pandl said in a recent research note that bitcoin is likely to overtake gold in market shares in 2022.
Goldman Sachs said that Bitcoin currently has a 20% share of the “store of value” market. The cryptocurrency’s market capitalization is at $700 billion, while $2.6 trillion worth of gold is owned as an investment.
Goldman Sachs has further predicted that Bitcoin will “most likely” become a bigger proportion over time. The American multinational investment bank and financial services company also noted that if Bitcoin were to grab a 50% market share, its price would reach just over $100,000, Blockchain.News reported.
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