Not just Bitcoin, but all other cryptos have dropped sharply in value along with financial markets in the midst of global unrest. Investor sentiment has now touched the “extreme fear” level and is expected to stay there for a while. Bitcoin prices went below the $38,000 level for the first time in a fortnight on February 20th, 2022.
Data gathered by online market trackers showed BTC/USD losing ground very clearly and sharply after sanctions were issued on Russia for its intention to invade Ukraine. BTC volatility can be gauged from its lows at $33,185 last month. This kind of volatility in the crypto market is a huge concern for investors as it looks more likely that the bear market will take over.
According to JP Morgan, US banking giant, the fair value of Bitcoin is ideally $38,000. JP Morgan’s analysts that the price will likely rise to $150,000 in the long run. The downturn in the crypto market started after UK PM Boris Johnson spoke of instituting financial blocks on all Russian businesses if the situation escalates. Bloomberg’s commodity strategist Mike McGone spoke about ongoing inflationary problems and the impact on the performance of risk assets. Bitcoin will likely have a rough week according to Mike McGone.
Since going over the $40,000 level in 2021, this number has been a springboard for the bull market and every attempt will be made to recapture this level. Each time the currency dropped below this number, it rebounded and gave investors hope. Given all the events of the last month, fresh loses are expected by everyone. People will swing between fear and extreme fear till the situation settles down and becomes calmer.