On Friday, January 22nd, trading in the global cryptocurrency market is accompanied by sharp fluctuations in the bitcoin rate.
In the first half of the day, the value of an electronic coin fell by more than 10% and for the first time since January 4, dropped to $ 28.9 thousand. However, in the evening the quotes won back some of the losses and were able to recover to $ 32 thousand. Such data are provided by the Coinmarketcap portal.
High uncertainty in the digital asset market is associated with an increased outflow of money from electronic coins.
This point of view in a conversation with RT was expressed by the executive director of EXANTE Anatoly Knyazev.
The bitcoin value grew steadily in mid-October 2020.
In less than three months, the rate of the largest cryptocurrency increased almost fourfold and at the auction on January 7 for the first time in its history exceeded the $ 40 thousand mark.As Anatoly Knyazev explained, after that investors began to withdraw money from the digital coin and thus fix profits.
In addition, in 2020, against the backdrop of the coronavirus pandemic and the collapse of the global economy, many investors were actively investing in cryptocurrencies to save their funds more reliably.
According to Knyazev, now the mood of market players has begun to gradually improve, so the interest of traders in bitcoin as a defensive asset has slightly decreased.
“At the moment, vaccination against COVID-19 is actively being deployed, and the uncertainty around the transfer of power to the United States has settled.
This allowed large investors to withdraw money from Bitcoin.
In addition, many Asian traders are now selling cryptocurrencies and fixing profits on the eve of the Lunar New Year, ”added Anatoly Knyazev.
Moreover, in an attempt to make money on cryptocurrencies, some large investors deliberately make predictions about the further fall of the market.
Thus, they want to achieve new sales of electronic coins, and later buy a digital asset at a bargain price.
The head of the analytical department of AMarkets Artyom Deev told RT about this.
“For example, the investment company Guggenheim Partners predicts an even more serious drop in the bitcoin rate in the near future.
However, it is known that in February the organization plans to seriously invest in cryptocurrency.
So, next month, the US Securities and Exchange Commission will approve their application for investing about $ 500 million in the Grayscale Bitcoin Trust shares, "Deyev said.
Grayscale Bitcoin Trust shares are backed by bitcoins and linked to the value of an electronic coin.
By purchasing such securities, investors gain access to the cryptocurrency market without the need to actually own bitcoins.
According to Anatoly Knyazev, some pressure on the value of bitcoin was exerted by the statements of the candidate for the post of the head of the US Treasury Janet Yellen.
On January 19, she stated that cryptocurrencies can improve the efficiency of the financial system, but at the same time can be used to finance terrorism, money laundering and other illegal activities.
“I think we need to tackle the question of how to encourage their use for legitimate activities and stop their use for malicious and illegal activities,” Yellen said.
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Experts interviewed by RT highly assess the likelihood of new fluctuations in the cryptocurrency market in the near future.
According to Artem Deev, the next collapse in the value of bitcoin below $ 30 thousand may lead to panic among ordinary investors and a new wave of sales.
As a result, the rate of the electronic coin runs the risk of dropping to $ 20 thousand, the expert believes.
However, after reaching the range of $ 19-20.5 thousand, the price of bitcoin will begin to recover.
This opinion is shared by the head of the data analysis department of CEX.IO Broker Yuri Mazur.
In his opinion, the actions of world central banks still play in favor of the cryptocurrency market.
In 2020, regulators in many countries significantly lowered interest rates and began to actively print money to support national economies.
Such a policy increases inflationary risks, so investors will again start buying digital coins more often to protect their money, Yuri Mazur said.
“After a period of depreciation, a new wave of growth may follow.
The target mark for bitcoin will be the level of $ 42 thousand. Exceeding this indicator will also be possible, but it is too early to make specific forecasts, ”the expert concluded.