Having entered 2022 with a mountain of expectations, the world’s largest cryptocurrency failed to perform, closing 65% of the month in the red zone and only 35% trading in the green.
In the first three weeks of 2022, the price of Bitcoin fell from comfortably over $47,000, to disappointingly below $34,000, driving the Bitcoin Fear and Greed Index to as low as 11/100 – deep into extreme fear territory.
Bitcoin Records Worst Start Since the Crypto Winter
Bitcoin’s persistent price drops in January saw the price of the asset plunge to as low as $33,000 from its all-time high of almost $69,000 in November.
Following the plummet to $33,000 on January 24th, Bitcoin staged a comeback, rallying to as high as $38,600. Although Bitcoin saw out January at close to $38,000, its 18% cumulative decline in January marked the worst start to a year for the dominant crypto asset since 2018, also known as the start of the “Crypto Winter.”
January price chart for Bitcoin (BTC). Source: Tradingview
Not only did the prices of Bitcoin hit a six-month low, but Bitcoin’s trading volume over the previous weekend was also the lowest recorded since July 2020. Further compounding its issues, the total assets under management of Bitcoin products have fallen by 23% since December.
The crypto winter got its name from the events of 2018 when cryptocurrency prices sharply declined, and was followed by a prolonged decrease in trades.
On the Flipside
- Regardless of its less than perfect start to the year, President of El Salvador, Nayib Bukele, remains bullish and predicts a ‘gigantic price increase’ for BTC in 2022.
Why You Should Care
Fear surrounding rising inflation and the hike in rates by the Fed were major factors that drove the price of Bitcoin down in January.