The Bitcoin price fell to $42,500 on Jan. 5, as minutes from December’s Federal Reserve meeting indicated that officials were considering whether to trim the U.S. Central Bank’s $8.3 trillion balance sheet. Analysts believe that a reduction in the balance sheet could put pressure on Bitcoin.
The Bitcoin price dropped 13.4% in tandem with news that the Bitcoin mining rate plunged 13.4% because of political unrest in Kazakhstan, which is due to an increase in fuel prices. The internet was shut down in Kazakhstan, which is the second largest country regarding Bitcoin (BTC). This happened after the country’s presiding Cabinet resigned.
This move was a major blow to Bitcoin miners in the country. According to data compiled and published by YCharts.com the overall Bitcoin network hash rate fell 13.4% within hours of the shutdown, from approximately 205,000 petahash per seconds (PH/s), to 177,330 PH/s. This country is responsible for 18% the Bitcoin network’s total hash activity.
Selling pressure also hit the altcoin market as many tokens suffered significant losses.
Safemoon’s share price is down 69% but users don’t have to be concerned. On January 2, the network announced that it was moving to SafemoonV2. CoinGecko data shows that the old Safemoon V1 is down 69%, while the new Safemoon V2 active is down 12%. The drastic drop in Safemoon token sales is explained by users who are switching to the new tokens. Its website states that support for V1 tokens has been officially ended and encourages migration to V2.
The following altcoins were not available at the time of publication: Chainlink (LINK+5.61%), Band protocol, (BAND), +11.60%), Uma, (UMA), +12.19%), Moonriver, (MOVR), +4.76%), Anyswap, (ANY), +16.60%).
Bitcoin was traded at $43,150 as of press time
Here’s what analysts have to say
The crypto fear index and the greed index, which indicate the sentiment of the market, have moved into the “extreme Fear” territory. This suggests that traders are more afraid.
Will Clemente, a crypto analyst, discusses the effects of the sale-off .
Kaleo, a crypto analyst, stated that he was starting to be bearish before the selloff. It just doesn’t seem right that we have been consolidating in this range so long and not being able to reclaim any significant amounts higher.
Michael Van de Poppe, Crypto analyst, believes that Bitcoin may reach its bottom if it recovers above $46k. “And the scenario below $46K is happening on Bitcoin. Now the question is, will we be hanging on here taking the liquidity and breaking back above $46K. The bottom is in that case. Similar to May “.
An analyst had previously identified $40,000-$42,000 to be the key area to hold Bitcoin. Action above it matching “accumulation.”
