On Sunday, crypto’s largest coin seemed to stabilise itself. The price of Bitcoin rose slightly and avoided dropping below the $40K level. This was a relief after a 6-day losing streak that caused many holders to worry that a steep sell-off would occur.
Bitcoin rose by 2% over the last 24 hours and now sits at around $42,100. If the 6-day losing streak has not been nipped in the bud, it would have been the longest since 2018. However, since its brief price increase, the coin has remained on an upward trend.
Bitcoin has not been below $40,000 since September last year. Furthermore, the coin reached a new all-time high of $69,000 in November. As a result, the recent price drop sparked fears in the community that a drop below the $40K mark might bring about retrenchment.
Historically, January has always been a bumpy month for Bitcoin. However, 2021 and 2022 so far have been exceptionally challenging. In 2022 so far, Bitcoin is down by 9%.
On it’s popular Telegram channel, QCP Capital (a cryptocurrency trading firm) wrote on Sunday, “If the market has settled at these levels, we might get that short squeeze we’ve been waiting so patiently for.”
The message refers to the Bitcoin holders who have been nervously waiting for a price increase over the past week.
The price of Bitcoin is low for a number of reasons however, word of Federal Reserve discussions last week was the main reason that the market became heated. The Federal Reserve released minutes last week that alluded to taking further steps to tackle the inflation rate.
Inflation is currently the highest that it has been in four decades. For many, the high levels of inflation are causing huge financial issues. However, Bitcoin seems to have benefitted from the inflation and from the governments ultra-loose emergency monetary policy that comes with it. A tightening of these policies was seen as a challenge for Bitcoin.
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