It’s difficult to pinpoint a specific root cause however, in this instance there appear to be various things at play.

To provide an understanding of extent of the fall (though the bellwether price bitcoin ( BTC-USD) was recovering a little by late Saturday afternoon, reaching $48,000 from a previous low of about $45,000) be aware that BTC was trading at $57,000 on the previous day. The change from that point to the current levels of an increase of 14.2 percent decline.

Other digital currencies like Ethereum ( ETH-USD ) are also down over the last 24 hours, too.

What is the reason for this?

THE FED 

The first weakness in the equities market that was triggered through Federal Reserve taper talk, makes investors fearful of speculative investments. Famous investor Louis Navellier is cautioned “that the tapering by the Federal Reserve could burst bubbles like the Bitcoin or crypto-currency bubble.”

Navellier claimed that the tapering of the Fed “should result in a correction of risk assets including Bitcoin. Bitcoin is a component.” He cautioned that Bitcoin’s value could fall to below $10,000.

THE COVID 

Naturally, there is a reason for this. Omicron variant outbreak, and the uncertainties surrounding the severity of the outbreak – and the effectiveness of vaccines that is yet to be confirmed – makes investors run towards the hills.

The Holidays

Also, it’s the season. A lot of investors who see the year coming to an end are trying to secure gains and keep cash off the table. In the end, despite recent losses, BTC is still up 66% over the course of the year. (Bitcoin began the year around $29,400)

Where are we going from here? It’s always difficult to know. It is certain that winter is coming. Is it actually crypto winter? Omicron could be a significant factor in determining.

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