Hello and welcome to the latest Overbit Weekly Round Up.
After minutes from the Federal Reserve's December FOMC meeting revealed that the regulator is dedicated to shrinking its balance sheet and raising interest rates in 2022, Bitcoin and the entire cryptocurrency market dropped.
According to the present position, the Fed is largely expected to begin raising its benchmark interest rate in March, "which would indicate that balance sheet reduction might begin before summer,".
Bitcoin reacted with its price dropping below $42,000 as stock markets fell, triggering a wave of liquidations that totalled $222 million in less than an hour.
Bitcoin was hit by a wave of selling that pushed the price to an intraday low of $43,717, according to data from Cointelegraph Markets Pro and TradingView. After oscillating around support at $46,000 for a few days, Bitcoin was hit by a wave of selling that pushed the price to an intraday low of $43,717.
If the price does not break back over $46,000, the market may be in for a prolonged bear trend, with Bitcoin retracing to the low $30,000 region.
The following figure, released by options trader and pseudonymous Twitter user Nunya Bizniz and published by CoinTelegraph, sums up the present market situation simply.
"Bitcoin monthly: Drops below the current RSI level have been particularly abrasive. Is it different this time? ".
The whole cryptocurrency market capitalisation is currently $2.123 trillion, with Bitcoin commanding a dominance rate of 39.4 per cent.
Closing out this week's edition of Overbit Weekly Round Up, we take a look at turmoil brewing in Kazakhstan, one of the countries to absorb a sizable chunk of China's hashrate after the mining ban last summer.
On Wednesday, thousands of people took to the streets throughout Kazakhstan to protest a significant increase in petrol prices that prompted the Central Asian country's government to quit.
According to state-run Khabar 24, the airport in Almaty, the country's largest city, was invaded by demonstrators, and a state of emergency has been declared throughout the country.
Reuters reported that the demonstrations began when the government abolished price limitations on liquefied petroleum gas (LPG) at the start of the year. Because of the inexpensive cost of gasoline, many Kazakhs have adapted their automobiles to operate on it.
According to a statement posted on the presidential website Wednesday, Prime Minister Askar Mamin resigned during the demonstrations, and President Kassym-Jomart Tokayev convened a conference to discuss "the increasingly tough socio-political and socio-economic situation in the nation."
After China's crackdown on Bitcoin mining last year, the industry found a home in Kazakhstan. According to Cambridge University, it was second only to the United States in terms of crypto mining energy, accounting for 18% of the global total as of August.
Crypto mining in Kazakhstan is now likely to suffer due to demonstrators storming government offices to protest rising energy bills, prompting Kazakhstan's leading telecommunications provider to shut down internet access.
"I guess some geeks would say that in theory, you could mine without internet, but in practice, all the machines in Kazakhstan should be turned off because of the internet shutdown," Jaran Mellerud, a researcher at Arcane Research, told CoinDesk.
"Also, Bitcoin.com estimates both Antpool, Poolin, F2Pool and Binance Pool to have seen significant reductions in their hashrate around the same time as the internet was shut down. These are pools widely used by Kazakh miners," Mellerud said.
Kazakhstan's popularity with crypto miners relied on the country's rich oil reserves and hitherto cheap electricity, which of course, is now in jeopardy with the country's ongoing fuel crisis.
That concludes this week's issue of Overbit Weekly Round Up. Thank you so much for reading, and until next time!