Today the price of Bitcoin is back down, below $40,000, to its lowest level in five months.
Why the price of Bitcoin is down
The problem, as Bloomberg Crypto reports, would appear to be the spread of risk aversion in financial markets, particularly in the US.
LATEST: Cryptocurrencies sank Friday, taking Bitcoin to the lowest level in more than five months as risk aversion again swept across global markets https://t.co/GA7mEesw7E
— Bloomberg Crypto (@crypto) January 21, 2022
The drop also affected all the other cryptocurrencies, with ETH dropping below $3,000.
Bloomberg also reports that according to some strategists at Fundstrat Digital Asset Research the price of Bitcoin remains subject “to the whims of macro variables”.
In fact, this now clearly demonstrates how Bitcoin has become part of the traditional financial markets, so much so that it is not at all able to move independently of what happens on other markets.
In particular yesterday the Nasdaq gave signs of selloff at closing, and gold has been appreciating for a few days. There is a fear that the monetary policy of the Fed will become more and more restrictive.
The RSI index has fallen into oversold territory, suggesting that today’s drop may be due to a rough patch.
In fact, the fundamentals are not only holding, but actually continue to strengthen.
Perhaps the most emblematic news from this point of view is the one concerning 300 US banks that are soon expected to offer their customers the possibility to buy and sell Bitcoin directly from their current account, via the home banking app.
This initiative is due to a partnership with NYDIG, which already allows precisely the buying and selling of BTC. In this way, Bitcoin trading will somehow enter directly into the bank accounts of many Americans, giving them direct and immediate access to the crypto market.
However, the service will only be active from the second quarter of 2022, so for now it can’t have any effect on the price.
It is worth noting that when PayPal did something similar, in November 2020, it generated a significant increase in Bitcoin trading volumes, so much so that it is absolutely safe to expect something similar in the coming months as well.
As far as the hashrate is concerned, in the last few days, it has returned to all-time highs, although it continues to fluctuate a lot between 160 Ehash/s and 230 Ehash/s.
The median fee per transaction on Bitcoin’s blockchain has dropped to $0.37, while the number of daily on-chain transactions is at September 2021 levels.
In other words, Bitcoin’s current price pains are not due to Bitcoin, or Bitcoin-related news, but to the financial markets and the spread of risk aversion at this time.