08 Jun 2021 Jane Whitmoore
Bitcoin Falls To $32,000 Amid Fed Taper Worries And Transaction Rate Lows
The crypto leader, Bitcoin, fell ten percent in just 24 hours, after trading at a high of $36,000 per BTC. The 10% drop pushed the price of Bitcoin down to a current level of $32,700. Bitcoin’s fall comes after a week of sideways action on the crypto market during which most of the leading assets traded without much price correction.
Source: CryptoBrowser
The downwards trajectory for Bitcoin may continue even further, according to gold bug Peter Schiff. He explained that if Bitcoin can’t secure a new high, its price may tumble down below $10,000. Schiff’s opinion is backed by some technical indicators, as it turns out Bitcoin is in a weak position - below its 20-, 50-, and 200-day Simple Moving Average (SMA) values.
Meanwhile, Bitcoin may face further downward price corrections, as the US Justice Department (DOJ) seized 63.7 Bitcoins from the DarkSide hacking group, which is responsible for the Colonial Pipeline attack.
“Law enforcement was able to track multiple transfers of bitcoin and identify that approximately 63.7 bitcoins, representing the proceeds of the victim’s ransom payment, had been transferred to a specific address, for which the FBI has the “private key,” or the rough equivalent of a password needed to access assets accessible from the specific Bitcoin address,” the announcement from the DOJ states.
The DOJ’s actions mean that US law enforcement services have the tools available for tracking crypto wallets, which dragged crypto-oriented sentiment.
“News that the government has figured out how to snatch bitcoin from the online wallets of cybercriminals surely reduces the use cases for Bitcoin even further,” Justin Wolfers, a professor of economics and public policy at the University of Michigan, noted.
Also, officials of the US Federal Reserve (Fed) suggested that the biggest central bank in the world may soon reduce the number of assets it purchases. The reduction would ultimately lower the liquidity levels, as have been supplying the markets with liquidity, pushing stock prices up, adding to the inflation.
Inflation puts investors in the position of seeking an effective hedge against it, and Bitcoin seemed a viable option. However, the deflationary practice may force some investors to cash out on Bitcoin and convert their assets into the stock market, for example.
The troubles for the world’s biggest cryptocurrency also affected its daily transaction rate. It turns out due to the outflow of investors and traders, the daily transactions of Bitcoin have plummeted to lows not seen since October 2018. The dip, however, is not a new thing, as statistics show a high of 387,000 transactions on January 6, 2021, and a constant declining pattern ever since. On June 7, the BTC network processed around 221,624 transactions.
Bitcoin’s downfall managed to tip over the entire sector, as the vast majority of crypto projects recorded double-digit price slumps, with Ethereum (ETH) losing 11% of its price in a day, Binance Coin (BNB) is down 12.5%, and Dogecoin tumbled down with 11,8%.
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