Crypto

These are the factors that caused the price of bitcoin (BTC) to fall below $ 50,000 on December 28

The price of bitcoin has fluctuated wildly in recent days. Within hours, it rose to more than $ 51,700 before falling sharply to $ 48,200. The driving force behind this volatility appears to come from the sell-offs taking place in the derivatives market. This is the opinion of bitcoin analyst On-Chain College who claimed on Twitter that the asset’s price drop below $ 50,000 was due to the liquidation of long positions.

A collapse with no consequences for bullish sentiments

The analyst’s opinion on the impact of bitcoin liquidations has been corroborated by data published by Coinglass. These show that more than 75% of the settlements that occurred on December 27 occurred in the last 12 hours of the day. Although these are valued at $ 71.04 million, 89.5% of them are long settlements. After these sell-offs, the price of bitcoin ended up falling below the $ 50,000 mark on December 28. Despite this price drop, market sentiment continued to be semi-military according to Santiment data.

Thus, the fact that the asset’s value remains at prices below $ 50,000 is encouraging and would imply that it remains at a justifiable level relative to its market capitalization. The metric used by Santiment to reach this conclusion is the ratio of network value to transactions (NVT). This is used in particular to get an idea of ​​the fair value of cryptocurrencies. Overall, this is a good thing for the market as the price is likely to rebound as market sentiment turns more bullish.

Expectations around bitcoin for 2022

Several market analysts have said that they expect the price of bitcoin to exceed $ 100,000. However, the timeframes for reaching the 6-digit bar vary from analyst to analyst. The most conservative believe that it will be necessary to wait until 2023 for such a scenario to occur. This is particularly the case with Jurrien Timmer, Director of Global Macro at Fidelity Investments, and Ian Balika, founder of Token Metrics.

On the other hand, more optimistic analysts, such as public accountant Kate Waltman, have pointed out that the price of bitcoin could reach $ 100,000 in the first quarter of 2022. Tom Lee will claim that the cryptocurrency will certainly reach the value of $ 200,000. After judging its 2021 performance disappointing, analyst Mathew Hyland is even more optimistic when he predicts the price will hit $ 250,000 in January 2022.

Despite the immediate effect of the recent sell off of long positions in bitcoin, supporters of the cryptocurrency remain highly optimistic about its development in the short term. However, the cryptocurrency has yet to recover from this crisis as it is still trading around $ 48,000.

Source: ZyCrypto

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Luc José Adjinacou

Far from dampening my enthusiasm, a failed investment in some cryptocurrencies in 2017 only increased my enthusiasm. Therefore, I resolved to study and understand blockchain and its many uses and to transmit information related to this ecosystem with my pen.

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