Bitcoin (BTC) has recently fallen below $40,000 after a 10% crash in the last 24 hours. This is the lowest price reached by Bitcoin since August 2021, when the market was recovering from a correction that lasted several months last summer. The whole cryptocurrency market has followed Bitcoin’s same trend and it is now operating in the red.
Bitcoin and Cryptocurrencies Fall
Bitcoin and cryptocurrencies have recently fallen after a week in which it seemed that BTC was able to remain above $40,000. However, during the first hours of the day, Bitcoin moved lower, reaching the lowest point since August 2021. As it usually happens, Bitcoin was not the only digital currency to move downwards.
Other digital currencies followed Bitcoin. According to data shared by CoinGecko, Ethereum (ETH), the second-largest cryptocurrency in the world, has registered 12% losses in the last 24 hours. Binance Coin (BNB), Cardano (ADA) and Solana (SOL) have also fallen by over 10% during the same period of time. This shows that the entire crypto market has moved lower in recent hours.
The question is now whether Bitcoin will stabilize between $35,000 and $39,000 or whether it would try to come back above $40,000 during the next weeks. Charts show that the next support levels for Bitcoin are $38,000 and $35,000. These are going to be very important price levels as they could help Bitcoin stabilize and avoid falling lower.
According to Peter Andersen, cryptocurrencies could be headed for a major correction in the coming days. During a conversation with FOX Business, Andersen Capital Management chief information officer Peter Andersen explained that the Federal Reserve (FED) could have an impact on the cryptocurrency market.
During the conversation he stated about Bitcoin:
“I think crypto is headed for a major correction. I don’t know when but hardly anybody understands the mathematics behind it.”
There are other things to take into consideration about cryptocurrencies. Macro events such as central banks increasing interest rates could have a negative impact on risk assets. Bitcoin and digital currencies are also considered risk assets. Some central banks around the world have already started increasing interest rates while others, such as the European Central Bank (ECB) might not do so in the near future.
At the time of writing this article, Bitcoin is being traded close to $38,850 and it has a market capitalization of $735 billion. It is also worth mentioning that Ethereum has also fallen below $3,000.