What were the reasons for the renewed Bitcoin crash?

The Bitcoin has again experienced a massive crash in recent days, falling to below $22,000 after heavy losses. Many investors are now wondering how the Bitcoin could go on. We wonder what the reasons for the latest Bitcoin crash were and whether this development can continue.

What happened to the Bitcoin course?

The Bitcoin price stood a few days ago at about $ 30,000. In recent weeks, the price has been moving between $ 29,000 and $ 32,000. This range was established after Bitcoin experienced its last massive crash at the beginning of May. At that time, the Bitcoin price fell below the support of $ 35,000.

BTC price over the past 3 months, Source: Coinmarketcap

After the price had stayed between 29.000 and 32.000 dollars in the last few days, now another massive crash began, in which the Bitcoin price fell towards the $ 20,000 mark. The last prices were the lowest prices for the Bitcoin for almost 2 years.

What were the reasons for the Bitcoin crash in recent months?

In recent weeks, we have been in a clear bear market. In November 2021, Bitcoin was still at an all-time high at over $ 68,000. This price has fallen significantly downwards since December and still saw massive losses for the most important cryptocurrency in 2022.

Since December, several reasons have been responsible for the crash of Bitcoin, which have come together and triggered the Bitcoin crash. These include the discovery of a new virus variant at that time, bad data from the stock market and the announcement of the increase in key interest rates by the American Central bank FED.

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What were the reasons for the Bitcoin crash of the last few weeks?

In recent weeks, we have seen even weaker Bitcoin prices. This had various reasons that brought the Bitcoin price down:

Which Increase in key interest rates by 0.5% was twice as high as expected. It was the highest rate hike in the U.S. in more than 20 years.
Which Inflation remains high despite this step, which increases the pressure and provides the basis for further increases.
Ever stronger regulations the US government continues to increase the pressure on cryptocurrencies in general.

The combination of these factors makes for an extremely difficult market situation, which is very well suited for causing new Bitcoin crashes.

What are the reasons for the current Bitcoin crash?

Within this difficult market situation, new economic data has now been published in the USA. Inflation rates remain extremely high in the US. As a result, the economic situation in the USA remains extremely tense. Further problems with inflation increases the likelihood that the US Central Bank FED will continue to raise interest rates in the near future.

Higher key interest rates are making the investment climate increasingly difficult, especially for risk investments. The zero interest rate policy of the last few months and years has helped Bitcoin extremely as a risk investment. Now, for the first time in years, interest rates are increasing, which allows capital to flow out massively from investments such as cryptocurrencies.

Is there any hope for positive development?

The combination of inflation, new interest rate increases and regulatory pressure in the US is an extremely difficult combination for the current Bitcoin price. That is why we are currently seeing these massive losses in the Bitcoin price. However, it also makes it more likely that Bitcoin is now extremely undervalued and the current price is mainly the result of these factors.

However, it is a popular fact that Bitcoin remains fundamentally a commodity, which is becoming less and less available. With the next Bitcoin halving, the mining rewards will decrease again and the value of the Bitcoin could rise massively again due to its decreasing availability. At the moment, the value seems to be extremely low with a view to the next few years.

You can also purchase Bitcoin and other cryptocurrencies on the crypto exchanges Coinbase and Kraken.

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