Bitcoin Drops Below $40K And Records Worst Annual Debut Ever

Bitcoin fell 6% to $39,774 early Monday afternoon, having meanwhile slowed its losses. In the past seven days, the cryptocurrency has already sank 13%, its worst annual start ever, according to data compiled by Bloomberg Galaxy Crypto Index.

Major cryptocurrencies in a market filled with over 15,000 crypto assets followed this negative trend. In the past week, the price of Ethereum fell by 21% to $3,008.01 while Solana’s price fell by 4% to $132.44.

Looking ahead, analysts estimate that the market’s most quoted cryptocurrency, as well as other digital currencies, will remain under pressure.

Speaking to Bloomberg, Jay Hatfield, CEO of Infrastructure Capital Advisors, commented, “Cryptocurrencies are likely to remain under pressure as the US Federal Reserve (Fed) scales back its liquidity injections.”

The executive even predicts the possibility that “Bitcoin will end the year with less than $22,000.” An unaccompanied forecast for this year by Bloomberg in the crypto-asset market, which, even taking into account the strict monetary policy in the United States, estimates that “Bitcoin’s support line is centered at $40 thousand and the resistance line at the hundred thousand dollars.”

Noelle Acheson, who is responsible for market analysis at Genesis Global, recalls that “the Fed’s tough policy affects not only interest rates, but also high-risk investments, such as cryptocurrencies.”

Last week, there was another sign that the Fed may act more aggressively if inflation remains elevated. Indeed, the minutes of the last meeting of the US Federal Reserve revealed that members of the central bank raised the possibility of starting to raise interest rates earlier than expected and in a faster manner. The first increase may be in March.