Key facts:
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BTC registers a drop in its price of 9.34% in the last week.
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Ecoinometrics suggests that the price of BTC might drop to $30,000.
Bitcoin (BTC) continues to show numbers in the red, following lowering its price to USD 34,000, causing the cryptocurrency market to lose USD 200 billion in capitalization.
The leading cryptocurrency in the last 24 hours its price has dropped by 3.68% and 9.34% in the last seven days. These negative numbers are also observed in other digital assets such as ether (ETH), a cryptocurrency native to Ethereumwhich has lowered its price by 7.93% in the last week.
The depreciation of bitcoin has led to the loss of the market reaching levels of July 2021, when the market capitalization fell to USD 1.2 billion, as details CoinMarketCap.
Although a recovery can be observed, which has taken the capitalization to USD 1,800 million. However, the cryptocurrency continues to have negative behavior not seen since 2014Until last Friday, five consecutive weeks were marked down for BTC, as reported by CriptoNoticias.
Everything seems to indicate that bitcoin might hit the six week low. So far, it has never reached seven weeks in negative numbers.
Fear invades traders and the traditional market
The sustained fall in the price of bitcoin continues to increase extreme fear in traders. On May 6, the measurement went from 27 to 22. Today, May 8, that fear intensifies, reaching 18, according to Bitcoin Fear and Green Indexplatform that collects data from social media posts, surveys, volatility and trading volume.
That fear might also be seen in the stock market last Friday, when as a whole it had the worst drop since 2020, losing 1,000 points of the Dow Jones index. This event was driven by investors’ fear of the US economic outlook in the medium and long term.
Both the cryptocurrency market and the traditional market have been greatly affected by this uncertainty generated by the government measures taken by the United Statesbehind the increase in interest rates by 0.5%, announced by the Federal Reserve.
This ordinance corresponds to a resource implemented by central banks to restrict credit and stimulate savings. By decreasing consumption levels, theoretically inflation should decrease.
In mid-April, annual inflation in the United States reached a record figure of 8.5%, the highest recorded in 41 years. Something similar happened in Europe when the YoY headline inflation was 7.5% in April.
The increase in general inflation is a product of the conflict between Russia and Ukraine, which caused an increase in food and energy. The latter especially affects Europe, because many of the countries that make up the community depend on Russian gas supplies and now face economic sanctions.
what’s coming
According to analyst Willy Woo, the price of the cryptocurrency might continue to fall. However, he believes that the recovery in value will be quick and sees a long-term bullish behavior.
Woo suggests we’re watching it play out a shock supply structure, with very strong purchases of bitcoin that have not been reflected in the price. “This usually ends in a big bullish price squeeze,” he notes, warning that this may take time to develop.
In this sense, the market is facing a possible break in the support line for the year, which has been USD 34,000, although only time will show it.
For its part, the firm Ecoinometrics pointed out last week that bitcoin might be at USD 30,000 soon. This line would appear to be the minimum support it would reach, following a strong sell off by traders.
