Amid the volatility in the cryptocurrency market, the price of Bitcoin has fallen sharply in recent days, falling nearly 9%, approaching support levels. This situation has triggered widespread attention and discussion in the market, and investors are full of concerns about future trends. According to analysis, it is difficult for Bitcoin to rebound significantly in the next 4-6 days. The market situation is grim and investors need to remain vigilant.

Market Trend Analysis

The cryptocurrency market has always attracted much attention, with violent price fluctuations and high investment risks. As the leader of the market, Bitcoin's trend often affects the entire market. The recent plunge has stoked panic in the market, with investors reassessing the balance of risk and return. Experts in the field of cryptocurrency pointed out that the current overall market atmosphere is pessimistic, with both technical and fundamental factors showing strong pressure, and it is difficult to see obvious signs of improvement in the short term.

Analysis of causes of Bitcoin price collapse

There are many factors leading to the plummeting price of Bitcoin. First of all, the uncertainty of regulatory policies has always been a major hidden danger in the market. Countries' regulatory stances on cryptocurrencies often fluctuate, and this uncertainty directly affects investor confidence. Secondly, the decline in market enthusiasm has also led to sluggish investor sentiment. In addition, some hacking incidents and market manipulation have also cast a shadow on the market, exacerbating investor panic.

Investor response strategy suggestions

Amid market fluctuations, investors need to respond calmly and formulate reasonable response strategies. First of all, you must be cautious and avoid blindly following the trend. You should adjust your positions according to your own risk tolerance and investment goals. Secondly, keep abreast of market trends, pay more attention to industry information and expert opinions, and make rational judgments. Finally, diversify investment risks, don't go all-in, and establish a good asset allocation.

Future Outlook and Risk Warning

Faced with the plummeting price of Bitcoin and market uncertainty, investors need to make long-term plans and avoid blindly following the trend and short-term trading. The future of the cryptocurrency market is full of challenges, but also holds great opportunities. Investors should remain rational, make prudent decisions, and grasp the investment rhythm in order to remain invincible amid market fluctuations.

To sum up, the plunge in the cryptocurrency market has sounded a warning to investors, and market risks cannot be ignored. Investors need to remain calm, analyze rationally, and make wise decisions. Only through continuous learning and practice can you gradually become a winner in the investment field. I hope every investor will continue to grow, overcome obstacles, and ultimately achieve success in this market baptism!

The four most famous international exchanges:

Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

Bitcoin and other cryptocurrencies tumbled on Monday as investors continued to worry about deteriorating macroeconomic conditions, tightening monetary policy and an economic slowdown caused by the Omicron variant of the virus.

Bitcoin fell 8.7% to around $46,000 on Monday. Ethereum tumbled 11% to $3,700, and other cryptocurrencies performed even worse, such as Solana, which fell by 13%, and Terra, which fell by 14%.

Bitcoin has fallen by more than 30% in 35 days and has fallen by nearly $23,000 since its high of about $69,000 in early November. Since it fell below the support level, this means a further downward trend from a technical perspective.

Fundstrat Global Advisors wrote in a Monday report: The near-term trend remains bearish, and momentum has not yet shown adequate signs of stabilizing and preparing for a rebound.

Fundstrat expects Bitcoin to trade lower in the next 4 to 6 days because Bitcoin has hit a recent low of about $47,660 and the next test point will be $41,634.

Ethereum also broke above the important support level at $3,900.
Fundstrat said: A break above $3,900 will cause the near-term trend to be bearish, with an initial drop to $3,521, so it is very important for Ethereum to hold the support during the recent retest.

Cryptocurrency weakness may come from short-term momentum factors. The Bitcoin supply has increased by more than 330,000 coins to short-term holders since mid-October, and some of that new money may now be flowing out. According to data from Coinglass, global exchanges have settled over $3 billion in long positions since December 1.

Open interest in Bitcoin futures is also declining, down 4.1% in the past 24 hours, with contracts valued at $17.2 billion. According to data from CoinShares, flows into cryptocurrency funds have been on a downward trend, falling to $88 million in the past week from $184 million the week before, and well below the $306 million in the week ended November 29.

If the significance of settlement and outflow is viewed positively, it means that traders intend to squat low and then jump high, that is, to withdraw funds first and prepare to rebound higher again. However, the point is based on the assumption that the market generally prefers risk. I am afraid it is difficult to swallow this assumption now.

More than a dozen central banks will meet this week to review monetary policy and interest rates, including the Fed, which is expected to hold meetings on Tuesday and Wednesday.

Markets are clearly concerned about Fed Chairman Jerome Powell
Powell may be more hawkish and cautious. Powell may indicate that the Fed will reduce its monthly bond purchases of US$120 billion early, which means that it will also raise interest rates earlier. It is currently expected to start raising interest rates in June 2022.

Technology stocks sold off on Monday on the prospect of rising interest rates, which would erode the present value of future cash flows. The bond market seemed more worried about slowing economic growth, with the 10-year U.S. Treasury yield falling to 1.43% from 1.49%.

Cryptocurrencies may be caught in the middle. Markets have been hammered as investors bet on reduced liquidity, slower economic growth and a grimmer outlook for all risk assets in 2022.