The Crypto market has already lost $200 billion in just six days after the start of 2022.
Main two reasons that caused the market fall are:
- U.S. Federal Reserve indicated that an interest rate hike could occur in March rather than the usual time frame. U.S. traditional markets also suffered. The shares of Nivida, AMD, and Adobe were down above 5%, S&P 500 and Dow Jones Industrial Average also closed in the red. Nasdaq pulled back 3.34%.
- The other reason is that Bitcoin faces mining problems from Iran and Kazakhstan. In Kazakhstan, wide protests are erupting because of the electricity shortage. The government has shut down the internet nationwide to stop the unrest that has forced local miners to stop mining activities. At the same time, Iran has stopped mining operations due to the winter season.
Larry Cermak, VP of research at the block, said: “Internet has been down in Kazahstan for a few hours where roughly 18% if Bitcoin’s hash rate is.”
Internet has been down in Kazahstan for a few hours where roughly 18% if Bitcoin's hashrate is.
Looks like the impact on the hashrate is so far 12% drop just in the last few hours since internet went down. pic.twitter.com/FcTDsJ6R77
— Larry Cermak (@lawmaster) January 5, 2022
The bitcoin market has already lost $105 billion in the first six days of 2022, while the overall crypto market has lost $200B today. It is unclear whether the factors are only Kazakhstan mining and the Fed’s positioning, but the market continues to watch closely.
With Bitcoin’s price at $42,800, this turns out to be the currency’s most significant drop since December 3, 2021. In the past 24 hours, the crypto market liquidated more than $800M positions and 208760 traders. BTC, ETH, SOL, BNB. ADA, DOGE, SHIB all went down more than 10%. BTC traders lost $317M worth of trading positions while ETH traders lost $163M. Other than BTC and ETH, SOL got the biggest hit with $18.9M worth of trading positions liquidated in the past 24 hours. The data also reveals that in the past 24 hours, $637.68 million worth of leveraged longs positions got liquidated as Bitcoin fell below $43K.
One of the analysts with more than 400,000 Twitter followers who predicted Bitcoin’s bearish move was Crypto Kaleo. According to him, the market is leaning downwards after a long consolidation.
“I’m starting to lean bearish. It just doesn’t feel right that we’ve been consolidating in this range for so long without being able to reclaim any significant levels higher.”
I'm starting to lean bearish.
Just doesn't feel right that we've been consolidating in this range for so long without being able to reclaim any significant levels higher.
— K A L E O (@CryptoKaleo) January 5, 2022
The situation with the mid-cap altcoins is worse, Tezos is down 16%, SushiSwap (-18%), Axie Infinity (-17%), etc. Finally, the accumulative Crypto market cap lost roughly $200 billion in a day and is just hanging above $2 trillion.