Bitcoin has shrugged off Monday’s plunge but is still losing significantly to its highs

The price of the most famous cryptocurrency, bitcoin, fell below $34,000 during Monday’s trading, its lowest level since July 25 last year, and about 51 percent below its current high of $68,990 hit last November.

However, bitcoin later managed to pare the loss and was trading around $36,440 around 2:30 p.m. Tuesday

According to analysts, Bitcoin and other cryptocurrencies have traded in line with developments in US stock markets, particularly the Nasdaq technology market index, over the past few weeks. He lost 7.6 percent last week. However, on weekends when stock markets were not trading, Bitcoin continued to fall.

In addition to the aggravated situation between Russia and Ukraine, the two-day meeting of the US Federal Reserve, which begins on Tuesday, is also making the markets nervous. The central bank is expected to confirm its readiness to hike rates.

Cryptocurrency investment analyst Michael Bucella of BlockTower Capital is not losing optimism. According to him, Bitcoin is still “solidly growing.” “This is a young asset class and the higher volatility in such a market is not very surprising,” he told CNBC.

Horizon CEO Mark Elenowitz, on the other hand, believes Bitcoin will struggle until macroeconomic conditions change. “In general, as interest rates rise, we may see more selling of seemingly risky assets like Bitcoin,” Elenowitz said.

The situation is now all the more acute as it is exacerbated by sharp falls in stock markets.

Martin Kysela,

According to Martin Kysela, an analyst of the portal, January sales in cryptocurrency markets are nothing new in themselves, and in recent years we have been able to see a similar pattern of behavior at this time. “The situation is now all the more severe, being exacerbated by sharp falls in equity markets, mainly due to persistent market overvaluation and rising inflation,” comments the analyst.

According to Kysela, even for speculative assets like cryptocurrencies, stock market panics tend to result in quick sells, but the subsequent surge tends to be faster than standard exchanges.

“Personally, I would recommend waiting until market sentiment stabilizes at this point. It’s still possible that we haven’t reached the bottom of the correction yet, and again Wednesday’s Fed statement could play an important role,” says Kysela.

According to him, if the situation stabilizes from a fundamental point of view, a correction in market structures and a return to higher values ​​can be expected.

“In the long term, buying in periods of significant market decline is a reasonable approach, and the current situation affects both experienced investors and speculators in both cryptocurrencies and stocks,” concludes Martin Kysela, an analyst at the portal.

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