This year is shaping up to be one of the worst years for Bitcoin and cryptocurrency in general. On Monday, the value of the world's largest cryptocurrency by market value continued to drop, dropping below $30,000 before recovering slightly.
Bitcoin has plunged nearly 50% from its all-time high of $69,000 in November last year, trading as low as $29,996 per coin Monday evening. The largest digital currency slightly recovered and is now trading at around $30,442 per coin. Over the past week, Bitcoin has fallen by around 21%. Since the start of the year, Bitcoin has fallen by about 47%.
The cryptocurrency market as a whole has been on a downward trend over the past few months, owing partly to the downward trend of the global economy and the conflict in Ukraine. Since its high in November, the crypto market has shed about $1.6 trillion in market value. Bitcoin has dipped by more than 12% in the past 24 hours, while Ethereum, the world's second-largest cryptocurrency, is down 19% for the week.
The last time bitcoin fell below $30,000 was in July 2021, when the digital currency fell to $29,839.80. Experts said that in order to avoid further worsening of technical sentiment, Bitcoin would need to sustain a crucial psychological price level of $33,000.
Assets such as Bitcoin and the stock market have been tumbling down since the Federal Reserve announced plans to increase the interest rate by a record half a percentage point. Bitcoin had dipped sharply back in May, following reports of the Delta variant impeding the expected economic recovery. It dropped from almost $60,000 in early May to under $35,000 by the end of the month, then dropped even more in July before rebounding in August.
A crypto whale is also putting pressure on Bitcoin, namely the recent de-pegging of Terra's UST stablecoin. On Saturday, the Luna Foundation Guard (LFG), a Terra-affiliated reserve, declared that it would offer $1.5 billion in Bitcoin and UST loans after the stablecoin's peg to the U.S. dollar was abandoned. Meanwhile, UST hasn't recovered its $1 value, plunging as low as 66 cents before recovering to 79 cents at the time of publishing this article.
Cryptocurrency analysts said the TerraUSD de-pegging from the U.S. Dollar, the ongoing inflation, and the recent announcement made by the Federal Reserve have all placed downward pressure on Bitcoin and the cryptocurrency market. They added that if developers can't hold the 1:1 mark amid notable withdrawals liquidity, investor confidence in Bitcoin and cryptocurrencies will continue to decline.