Key points
- Bitcoin price down 4% overnight
- Cryptos have sold off amid higher interest rate expectations
- Longer-term investors are awaiting the next halving
The Bitcoin (CRYPTO: BTC) price slipped again over the past 24 hours, down just over 4%.
At time of writing, the token is trading for US$36,955 (AU$51,795).
While that's still up 3% since this time last week, the Bitcoin price remains down 19% for the year and down 46% since its 10 November all-time highs.
Image source: Getty Images
What could impact the Bitcoin price next?
The Bitcoin price has been taking a wallop as investors around the world are increasingly pricing in interest rate hikes in their decisions.
Most every crypto, outside of stablecoins, is deep in the red for the New Year.
Although the Reserve Bank of Australia (RBA) held fire on raising rates during Tuesday's meeting, governor Philip Lowe didn't rule out lifting the cash rate at some stage in 2022.
And over in the United States, the Federal Reserve Bank has flagged the potential of multiple rate rises this year.
That's seen risk assets, like high valuation technology shares and most cryptos, sold off. And it's seeing investors keep a keen eye on global rate movements to help gauge where the Bitcoin price could be heading next.
According to Edward Moya, senior market analyst at Oanda (quoted by Bloomberg), "Bitcoin will continue to trade like a risky asset and most likely benefit if central banks continue to show some hesitancy in turning very aggressive with tightening monetary policy."
Moya said the Bank of England and European Central Bank interest rate decisions, due this month, "might have a larger impact on cryptos than normal as Wall Street is looking for a cue on which direction risk appetite is headed".
Should the ECB and BoE hold fire, it could offer up some short-term tailwinds for the Bitcoin price.
Longer-term crypto investors eyeing the next halving
Investors with long-term horizons hoping to see a big lift in the Bitcoin price are looking ahead to 2024.
Why 2024?
That's when the next Bitcoin halving takes place. This happens every 4 years and will diminish the pace that any new tokens can be created, which some crypto investors argue will see the Bitcoin price gain.
Among those is Jirayut Srupsrisopa, CEO of Bitkub Capital Group Holdings.
As Bloomberg reports, Srupsrisopa is keeping a close eye on the 6 months following the next halving. He points to past trends, indicating that could be a "golden period" for the Bitcoin price.
He cautioned crypto investors to be prepared for "corrections" and "high volatility" in the shorter-term, saying "tightening liquidity is squeezing fund inflows, especially from retail investors".
