Even if there was a significant decrease in bitcoin prices in the past few days, the accumulators of bitcoin are not shaken. Earlier this month, there was a decrease in bitcoin prices, and they also started to withdraw their investment out of it. However, as the lower prices are approaching, people look forward to bitcoin as a positive outlook. As a result, they are purchasing more bitcoins, and it is concluded that there were about 5924 bitcoins on Sunday. Also, it is the most significant number of bitcoins leaving any centralized market in the past few months since August. A total of bitcoins worth $3 billion were issued from some of the most popular centralized cryptocurrency exchanges from all over the world.
The main reason behind the mass purchases of cryptocurrencies in the first few days is the expectation of a price rise in the future. It is a positive outlook for people because they are making such vast purchases of bitcoins. It is a widespread and typical phenomenon that when the investors expect the prices to increase shortly, they start to purchase any cryptocurrency that will experience a rise in its prices. As a result, there is less selling pressure, the market is expected to rise in the future, and the prices of bitcoin will also increase. According to the most popular cryptocurrency exchanges like the official bitcoin code website and enthusiasts, the large purchase of bitcoin is an indicator of selling pressure. Therefore, when people were withdrawing in large amounts, the cryptocurrency started to fall, and now they are purchasing at lower prices.
The recent large Bitcoin purchases have made a considerable profit for some cryptocurrency exchanges. February was when people purchased cryptocurrencies in large numbers, and now, the face has returned. Also, according to the United States Federal Reserve, the inflation in November has been highest since the past few decades. Also, the Federal Reserve is looking forward to the current period of mining in the crisis era by the new bill published by the authorities. Some popular stock market commodities in the United States also increased by 3.8% and 3.6% in the past few weeks. The four-week losing trend for any bitcoin rally has been considered as 4%. Now, the three-week losing trend is predicted at 1.2%.
As investors are accumulating a high number of bitcoins, it is considered that the risky asset will get some fluctuation in prices. Also, due to the enormous confidence of investors, the bad news is about to end now. The prices are expected to increase shortly, indicating that it is standing at the slightest resistance level of the higher side. In the second half of November, the prices of bitcoins kept on decreasing while it was slowly recovering at some point in time. Also, due to the emergence of the new Coronavirus variant, the Federal Reserve and some other international organizations are under concern. The new virus is not only posing a threat to the cryptocurrency economy, but the existing physical commodities are also facing a threat. Due to other reasons like the mining ban in China and many more, the cryptocurrency industry was already down.
The Federal Reserve meeting
According to the report, the Federal Reserve is looking forward to holding the two-day meeting from December 14 to December 15, 2021. In this meeting, they are looking forward to ending the monthly bond purchases from March 2022 till mid-2022. It will signal that the Federal reserve is looking forward to increasing the prices from the following year. The main reason behind this meeting is nothing else but the control of inflation in the country. Inflation is rising at a breakneck pace. Due to the lower employment rate, some folks are also experiencing a downfall in their savings.
The Bank of England is also likely to increase the interest rate from 2022. The chief market strategist of a cryptocurrency exchange stated that the bank of England has been preparing a strategy to tackle the inflation rate in the country. Due to the high demand, commodities are touching the skies regarding prices. Therefore, it needs to be addressed in the shortest period, and therefore, it will bring a new bill in 2022. In addition, it seeks to control the rising inflation and promote employment in the country.