Bitcoin showing strong support at $ 48,000, why did the price drop? – The VR soldier

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After the recent correction in the cryptocurrency market, both Bitcoin and Ethereum have rebounded strongly. Most cryptocurrencies only recorded single-digit percentage losses, with some seeing bullish momentum. At the time of writing, the price of Bitcoin is continuously showing strong support at $ 48,000 as it attempts to break through the $ 50,000 level again.

The recent decline in the cryptocurrency market has erased over $ 600 billion from the global cryptocurrency market cap. As for the reason for the recent bearish move, some will cite the spread of the Omicron variant of Covid, while others will blame the Fed for recently suggesting higher interest rates.

With news of the Omicron variant spreading across the United States, market action is reminiscent of the July crash when news about the Delta variant of Covid spread.

The good news is that we are seeing market action similar to what happened in July, with crypto markets rebounding strongly just days after the crash.

Another reason for this weekend’s bearish momentum could be the Fed’s interest rate hike, discouraging investors from putting their money into crypto and stocks.

According to Coindesk, in November, Federal Reserve Chairman Jerome Powell announced that the Fed would start reducing its purchases of Treasury bonds and mortgage-backed securities. The program is expected to be exhausted in mid-2022 to reduce inflation.

In addition to the above two factors influencing the recent price of Bitcoin, the House committee announced that crypto CEOs will testify on December 8 at a hearing on digital assets.

According to a tweet posted by Jeremy Allaire, co-founder and CEO of Circle, the committee will discuss crypto and national economic competitiveness for the United States.

Looking forward to hearing next week with @RepMaxineWaters, rank member @PatrickMcHenry and the full committee (@FSCDems) to discuss crypto and national economic competitiveness for the United States. https://t.co/rVHAvaPMUd

– Jeremy Allaire (@jerallaire) December 1, 2021

While calling CEOs to discuss the challenges and benefits of financial innovation isn’t new bearish in and of itself, the potential increase in regulation resulting from this meeting could be detrimental to the crypto markets as a whole.

The United States is already behind China when it allows merchants to invest in ICOs, IDOs, etc. For example, Binance is not available to users in the United States, and some of the most popular and influential projects are available on Binance first. The restriction means that U.S. investors are excluded from a large crypto industry and don’t even have the opportunity to participate in high ROI presales.

The good news is that the crypto markets are holding up the current support level pretty well, with Bitcoin currently trading at $ 48,684 and Ethereum at $ 4,100.

Bitcoin is approaching the $ 49,000- $ 50,000 level, seeking to establish new support. While the recent pullback may seem drastic to some, a 20-30% loss is no reason for most crypto holders to panic.

While December is known to be Bitcoin’s hottest month, a pullback before a bull run is not uncommon. If Bitcoin can establish $ 50,000 as short-term support, the chances of falling below $ 40,000 are slim. However, if Bitcoin cannot break through the $ 50,000 resistance, don’t be surprised if we see another correction.

Disclosure: This is not trading or investment advice. Always do your research before buying a cryptocurrency.

Also read:

Top 7 Metaverse Coins With Unit Price Under $ 0.1

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