Since the beginning of the year, the world’s largest cryptocurrency by market capitalization Bitcoin (BTC) has suffered a major price dip.
Data on popular cryptocurrency aggregator site Coingecko showed that Bitcoin has shredded over 35% of its value on a year-to-date basis. In the past week alone, bitcoin has fallen 21.14% and is currently changing hands below $34,000, at the time of writing.
Last week’s dip was mainly championed by different factors. At the top of that list is Russia Central Bank’s intention to put a blanket ban on crypto-related activities, including trading, mining, and its use in payments.
Bitcoin, however, stabilized on Sunday, recording a 3.43% gain in the early hours of today.
Bitcoin Dip Not Over
According to data published by Charles Edwards, founder of crypto investment firm Capriole, Bitcoin may be close to the end of its bear season, as the market’s network value to transaction (NVT) ratiometric displays an oversold signal.
Hello NVT old friend.
— Charles Edwards (@caprioleio) January 24, 2022
While enthusiasts may think they are close to seeing the end of Bitcoin bear season, the cryptocurrency plummeted again, this time, it fell below $34,000.
Unfortunately, the Bitcoin dip may be far from being over. On Wednesday, the Federal Reserve is expected to raise interest rates in March, in a bid to curb rising inflation. The decision will be made during the inaugural meeting of 2022.
While this is above what economists expect, the Fed believes increased inflation is a threat to a sustainable economy and, as such, may opt to raise its interest rates.
Regulators Seeking to Ban Bitcoin
Bitcoin is not free from global regulatory concerns. As Bitcoin continues to gain mainstream popularity, global regulators are considering regulating or totally banning the asset class to protect existing monetary policies.
Aside from Russia pushing for a blanket ban on cryptocurrency, countries like China and Myanmar have banned related activities within their jurisdiction, while imposing a penalty for people who go against the bill.
More countries may likely follow the approach of China and Myanmar. At the moment, the Pakistani government is pushing to ban crypto activities in its territory.