Bitcoin price slumped 4.3 percent and fell in the range of US $ 34,000. Meanwhile, Etherum (ETH) is also down by 6.8 percent and touched US$2,201, this value also brings Ethereum to its lowest value since July 2021. Analysts reveal a downward trend in the value of crypto assets, especially Bitcoin and Ethereum.

1. Negative Market Sentiment

The decline in the price of Bitcoin (BTC) is a simple continuation of the same trend that has occurred in the last few weeks – negative market sentiment. "Sentiment is driven by a series of downbeat news headlines that dominate all forms of objective asset data," said Jason Deane, analyst at Quantum Economics. Although Deane's long-term outlook is positive, he thinks that the current price action may continue in the near term or in the short term, and this downward trend in prices is possible again.

2. Long Leverage

Ben McMillan, founder of IDX Digital Assets said the cause of Bitcoin's plunge was leveraged long positions, which exacerbated the selloff to the Asian Session Market on Friday (1/21/2022). "This is almost always the case with Bitcoin," said McMillan. It should be noted that Leverage is a strategy for investors to use debt (loan capital) to increase their investment return opportunities.

3. BTC Follows Traditional Markets

Bitcoin and the broader cryptocurrency market as a whole act as beta assets with high sentiment. That is, they move in tandem with the broader market and are more affected by the recent negative sentiment. That's according to Lucas Outumuro, head of research at IntoTheBlock. “Macroeconomic fears and poor tech company earnings also exacerbate this correlation,” Outumuro said.