During the past 24 hours, Bitcoin significantly increased and once again reached above a psychologically important level of $30,000. At that time, the price reached $30,622. However, bitcoin returned to its previous levels, and the cryptocurrency market returned to its usual state of high volatility, which has been remaining for several weeks.
At the time of writing, BTC is trading at $29,273. The cryptocurrency has lost more than 55% in value since last November when digital gold broke a historical record by soaring above $69,000.
Current market situation
Yesterday, leading altcoins of the cryptocurrency market followed Bitcoin's short-term growth and gained in value during the day. On Monday, Ethereum rose to $2,085, but now the coin is trading at $1,975. Other altcoins from the top 10 cryptocurrencies by capitalization - Cardano, Dogecoin, and Tron - also showed a steady rise over the last 24 hours, but eventually returned to Friday's levels.
By the way, compared to the cryptocurrency market rollercoaster that it has been demonstrating since the beginning of this year, the past week was relatively stable for digital coins. For several days, Bitcoin hovered at $30,000 and even tried to make a rally but failed. Bitcoin showed spectacular results on Monday when quotations of the asset jumped above $31,000 but then collapsed sharply by $2,000. Later, BTC tried to repeat this rush, and already during the weekend, the coin was trading near $30,000.
Previous ups and downs
Since the beginning of May, Bitcoin has fallen by almost 20%. In April, BTC fell by 16.2% to the lowest level since 2011.
At the end of the first quarter of 2022, the flagship cryptocurrency lost 1.5%. At the same time, March was a fairly favorable period for the asset, as a result of which it reported a growth of 10%, having strengthened for the second month in a row.
Bitcoin lost more than 16% in January, and its price rose by 12% during February.
At the end of the year, Bitcoin's price increased by 1.6 times to $46,200 from $28,900.
Key pressure factors
Experts say that the armed Russian-Ukrainian conflict is the main reason for such a strong decline in the market of digital assets. Due to the sanctions imposed against Russia, the cryptocurrency market is losing a considerable share of consumers from this country.
Another important downward factor for the value of digital assets was the permanently increasing dominance of the United States in the cryptocurrency market. This state of affairs was a continuation of the political war that has been going on in the currency arena since 2014. This dominance of the US became especially evident in the past year when China imposed bans on the use of cryptocurrencies.
The monetary policy of the US Federal Reserve can also be called an additional incentive to disappoint investors in the reliability of digital assets.
Thus, crypto analysts tie the current decline in the crypto market with the recent increase in the US Federal Reserve's benchmark interest rate. Investors are concerned that the rapid growth of inflation in the future may force the regulator to raise the rate even faster.
Forecasts by crypto experts
The unpredictable behavior of the crypto market makes analysts make the most surprising predictions about its future. Thus, the day before Scott Minerd, the investment director of the international consulting company Guggenheim Partners, said that very shortly the value of BTC may fall below $8,000. The expert believes that the key reason for such pessimistic developments could be an increase in the base interest rate and a tightening of the monetary policy by the US Federal Reserve.
In addition, Minerd calls most cryptocurrencies "junk," stating that only Bitcoin and Ethereum can survive the current crypto winter.
By the way, disappointing predictions for the digital asset market has been made before. Recently, well-known Bitcoin critic Peter Schiff also predicted the fall of the first cryptocurrency to the level of $8,000. Schiff believes that the recent breakthrough of the level of $30,000 could become a significant factor.
Earlier, Global Macro Investor CEO Raoul Pal suggested that the coming May and June would be the most troublesome months for Bitcoin, which means a new wave of sales in the cryptocurrency market may become inevitable.
eCurrency CEO Jonathan Dharmapalan echoes the pessimistic sentiments of his colleagues and believes that against the backdrop of the collapse of the Terra ecosystem and TerraUSD stablecoin, the world's leading central banks will actively pursue the launch of their digital currencies.
American entrepreneur Charles Hoskinson believes that a new crypto winter has begun in the cryptocurrency market. Hoskinson is sure that as of today there is not a single weighty factor that can provoke an upward rebound in the market.
Amid a spectacular decline in the value of the main digital asset, CEO of cryptocurrency exchange Kraken Jesse Powell said he expected Bitcoin to fall to $20,000. When the coin reaches this mark, the investor plans to allocate the bulk of his capital to buy cheap bitcoins.
