Bitcoin Briefly Touches $39K, Price Rebounds after Tanking

2022 has continued to be a nightmare for many crypto enthusiasts as the value of the majority of the digital currencies continues to dip. The new year continues to signal a bearish run, with market prices dropping below expectations. Within the last 24 hours, the flagship digital asset Bitcoin (BTC) took another major hit as its price dropped below the $40k mark for the first time since September. While the value has since corrected, and it is currently trading for $41,861, its current price is still far off its previous ATH set in November of last year.

Apart from Bitcoin, other major cryptocurrencies like Ethereum have also taken a slump. Ether’s value dropped to as low as $2979 for the first time since early October. However, like its more illustrious counterpart, its value has since recovered, and it is currently exchanging hands above $3,100 again.

According to many analysts in the space, the current bear market was caused by the revelation that the Federal Reserve would dial back its monetary policy support by hiking interest rates. This news had rocked the entire crypto and stock markets, leading to the loss of value for many projects in both spaces.

Speaking on the recent price action, which saw Bitcoin drop below the $40k mark, leading crypto analyst Michael van de Poppe said:

“And we’re dipping into the $40K region for Bitcoin, through which the fear will only accelerate even more.”

“People are considering selling off partially at this stage, as they expect markets to drop further. Next to that, most of the people are assuming we’re only going down, as a bear thesis is currently the primary scenario,” concluded he.

For Rekt Capital, another crypto analyst and trader, support for Bitcoin currently lies in the lower Bollinger Bands as the spot price of the asset is very close now.

Bitcoin’s false break below the 40k mark, however, could lead to a short-term bull run for the asset as it is being seen already with the recent price performance.

While skeptics of the coin would point to the recent volatile market as to why investors should remain wary of the industry, many Bitcoin enthusiasts, like President of El Salvador Nayib Bukele, have predicted that BTC price could reach $100k this year.

His view was also shared by analysts at Goldman Sachs, who believe that the asset could reach that figure if investors began to view it as a store of value and as digital gold. This way, it is believed that BTC’s share of the “store of value” market would rise to 50%, thereby pushing it to the elusive figure.

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