The price of bitcoin fell more than 8 percent today, from around $43,000 to below $39,000, its lowest level since last August. The retreat from risky assets seems to have prevailed since the beginning of the year and may be supported by the prospect of a slightly tighter monetary policy from the Federal Reserve.
BTC price declines may also be influenced by the Russian central bank's proposal to ban the use and mining of any cryptocurrencies. If such a ban came into effect, then Russia would become the second major country after China with such a strict approach to cryptocurrencies.
Declines also seen on exchanges
According to Coinmarketcap data, about $147 billion has evaporated from the entire cryptocurrency market in the last 24 hours. However, the aforementioned negative sentiment towards risky assets also seems to be dominating the stock market, especially the Nasdaq technology index. Back in November, it was in the region of 16750 points, only to fall to 14650 points yesterday. Consequently, the Nasdaq 100 could find itself at levels last seen three months ago. Investors may be starting to worry about whether there will be a larger correction or a bull market on Wall Street.
According to futures, the Federal Reserve may raise interest rates by 1 percentage point this year, to 1-1.25 percent, which could also weigh on stock sentiment. The Fed will hold its first meeting of the year on Jan. 25-26. That's when the market could get answers to questions about the 2022 interest rate hike cycle.
Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Forex service)
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