In the early hours of January 6, Bitcoin touched a local low at $42,500 (on the Binance exchange). In the last 24 hours, the top cryptocurrency’s price fell by 7.5%, according to CoinGecko.
At the time of writing, digital gold was trading near $43,150.
Bitcoin dragged the rest of the market lower. According to CoinGecko, all top-10 cryptocurrencies by market cap were in the red. Over the past day, Ethereum fell 9.9%, Solana declined 12.2%, and Polkadot fell 12.5%.
The decline came amid news that the U.S. Federal Reserve is prepared to raise the policy rate earlier and more quickly than expected. In the previously published minutes of the December Open Market Committee (FOMC) meeting, the regulator linked the decision to a strengthening economy and high inflation.
According to the report, some Fed officials noted that soon after lifting the policy rate, the Fed may have to shrink the size of its balance sheet.
The minutes also noted that the pace of balance-sheet runoff would be faster than in October 2017, when the regulator also wound down its quantitative easing program.
Traditional markets reacted negatively to the Fed’s statement. The S&P 500 (SPX) fell almost 2%, Dow Jones (DJI) down 1.07%. The technology sector’s reaction was especially painful — the Nasdaq Composite (IXIC) slid 3.34%.
Meanwhile, amid internet outages in Kazakhstan, there was a significant drop in Bitcoin’s hashrate. After the mining ban in China, many sector players moved their computing power to the country.
Internet has been down in Kazakhstan for a few hours, where roughly 18% of Bitcoin’s hashrate is affected.
Looks like the impact on the hashrate is a 12% drop so far in the last few hours since the internet went down. pic.twitter.com/FcTDsJ6R77
— Larry Cermak (@lawmaster) January 5, 2022
According to The Block’s vice president of research, Larry Cermak, Kazakhstan hosts about 18% of the Bitcoin network’s hashrate. According to BTC.com, on January 5, the performance of some mining pools was indeed decreasing.
As of writing, Bitcoin’s hashrate stood at 177.85 EH/s, roughly the level seen in May 2021.
As a reminder, billionaire Louis Navellier warned that Bitcoin could fall to $10,000. According to him, a formation signal of a “double top” is strengthening on the chart, and its realization could occur as the Fed normalises monetary policy.
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