Good morning! … but not really. Yesterday evening (GMT) bitcoin began falling substantially and we know the drill, when BTC goes down, everything else follows. The price fell pretty sharply, from $46k to $44 in less than an hour, and it began consolidating on its way down and it is currently trading at around $42,900. Honestly, I desperately want it to stop falling (duh) but I get the feeling things may get a bit worse before they get better.
One of the reasons why BTC may have crashed is the number of actively trading wallets has gone down. About a year ago we had 1.2m actively trading wallets and now we’ve got 971,000, which means there are fewer wallets that are buying and some wallets (may) have been emptied to sell and get out. On top of that, many holders are moving their BTC from cold wallets to hot wallets and/or exchanges, nothing’s happened so far but it looks like the preview of a massive sell-off. Or at least that’s what the market thinks it is.
The second reason is the Kazakh government has resigned, pretty much overnight (not literally, it didn’t happen last night) amid harsh protests, mainly due to rising prices of goods and services, especially fuel. To add fuel to the fire (sorry, pun unintended), the country’s main (you might as well call it monopolistic) internet provider, Kazakhtelecom, literally shut down the internet. Why is this relevant? That’s because Kazakhstan is the world’s second-largest bitcoin miner. The hash rate has gone down by 13.4%, again, pretty much overnight.
The third reason is that even though we tend to think of bitcoin as a hedge against inflation, it actually often follows the pattern of institutional sentiment and tech stocks. The Fed has been sharing bad news for days. First, they admitted that yes, inflation is not going away soon, then they shared a document, which made analyst say, “so is the R-word coming?”
What are you going to do? Sell and buy back again or hang in there and resist?
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