Crypto Market Bloodbath: Bitcoin Slumps to Its Three-Month Low, Key Metrics to Watch

Bhushan Akolkar
January 6, 2022 Updated August 14, 2024
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Will Bitcoin Price Recover After $1.7 Billion Liquidation Event?

In another major flash crash of the broader cryptocurrency market, the Bitcoin (BTC) price has dropped to a three-month low! As of press time, the world’s largest cryptocurrency is trading 6.21% down at a price of $43,452 and a market cap of $820 billion.

With this latest price crash, Bitcoin has eroded more than $65 billion worth of investors’ wealth. the recent price correction in the broader crypto market seems to be an outcome of the hawkish comments from the Federal Reserves on Wednesday, January 5.

Read: 90% Of Bitcoin’s Supply Has Been Mined And 4 Other Crypto Updates Of The Day!

The U.S. central bank has flagged the possibility of fast interest rate hikes than expected. This led Wall Street to go into a completely bearish zone after a strong start ahead this year. The after-effects of the Fed commentary have been across asset classes including crypto, stock, and precious metals. It has been for the first time that the Bitcoin price has tanked under $43,000 since September 2021.

Speaking to Bloomberg, Stephane Ouellette, chief executive and co-founder of crypto platform FRNT Financial Inc said:

“The Fed is hawkish. Knee-jerk reactions in crypto tend to treat them as exclusively risk assets in spite of the longer term trends around inflation, store of value et cetera.”

Bitcoin Enthusiasm on the Downtrend

Bitcoin has been struggling at $47,000 levels for quite a while over the last few weeks. The world’s largest cryptocurrency remains dovish against the broader market expectations of BTC going to $100K levels.

Also, the saggy trading volumes in Bitcoin show that enthusiasm surrounding Bitcoin has been dropping fast. As Bloomberg reports:

After trending lower for months, volume across exchanges clocked in at a mere US$4.8 billion on Tuesday, data from Kaiko compiled by Messari show. That’s down from US$13.1 billion a year earlier, and is well below the one-year average of roughly US$9.2 billion.

Bitcoin’s daily trading volume hasn’t even surged past $10 billion after the last price crash on December 4. Furthermore, the open interest for Bitcoin Futures has also fizzled out. There’s a near 40% drop in the BTC Futures open interest in the last three months.

With trading volumes dropping, the volatility has spiked up as we can see currently in the market.

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Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
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Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
Bhushan is a seasoned crypto writer with over eight years of experience spanning more than 10,000 contributions across multiple platforms like CoinGape, CoinSpeaker, Bitcoinist, Crypto News Flash, and others. Being a Fintech enthusiast, he loves reporting across Crypto, Blockchain, DeFi, Global Macros with a keen understanding in financial markets. 

He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills. Bhushan has a bachelors degree in electronics engineering, however, his interest in finance and economics drives him to crypto and blockchain.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.