Bitcoin (BTC) dropped below $42K for the first time since September 2021 as the market remains in the red.
The leading cryptocurrency was down by 2.92% in the last 24 hours to hit $41,733 during intraday trading, according to CoinMarketCap.
This represents a 39.5% decline from the all-time high (ATH) price of $69,000 hit in November last year.
A wave of protests erupted in Kazakhstan due to high energy costs. As a result, the nation’s administration imposed a countrywide internet shutdown to tame the unrest, prompting BTC miners to shut down their operations.
Therefore, the Bitcoin mining hashrate has slipped by 19.6% from the peak of 229 EH/s recorded on January 1 to the current 184.25 EH/s, according to data analytic platform Coinwarz.
Kazakhstan has become the second-largest BTC mining hub after the United States, following the mass exodus of miners from China in May 2021.
Therefore, there is a great probability that the Fed will raise interest rates this year amid greater discomfort with high inflation. As a safe-haven asset with high inflation, Bitcoin fell below $44,000 immediately after the announcement, and the price continues to nosedive.
The significant liquidation in the crypto market has sent the market cap below $2 trillion as it sits at $1.96 trillion, according to CoinMarketCap.
Meanwhile, market analyst Michael van de Poppe believes that Bitcoin needs to reclaim the $46,000 level to realize an upward momentum. He stated:
“Might be a scenario for a reversal on Bitcoin. In that case, bullish divergence seems to be created (another scenario is a fast recovery above $46K, that’d be a signal too).”
With El Salvador President Nayib Bukele disclosing his bullish forecasts that Bitcoin price could reach $100,000 this year, it remains to be seen how the top cryptocurrency will play out.
However, Goldman Sachs analyst Zach Pandl said in a recent research note that bitcoin is likely to overtake gold in market shares in 2022.
Goldman Sachs said that Bitcoin currently has a 20% share of the “store of value” market. The cryptocurrency’s market capitalization is at $700 billion, while $2.6 trillion worth of gold is owned as an investment.
Goldman Sachs has further predicted that Bitcoin will “most likely” become a bigger proportion over time. The American multinational investment bank and financial services company also noted that if Bitcoin were to grab a 50% market share, its price would reach just over $100,000, Blockchain.News reported.
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