The BTC/USD coin failed to extend its upward rally of the previous day, dropping more than 6% below the $40,000 level, with the last trading at about $38,800 at the time of writing. Bitcoin started a substantial decline from the $43,500 resistance against the US Dollar. However, BTC is still vulnerable to further losses below the $38,300 support. The downfalls occurred after Russia’s central bank suggested a ban on the use and mining of cryptocurrencies on Thursday.

Russia is one of the most popular Bitcoin mining regions on the planet. Because of the Russian plan, senior market analyst, Edward Moya of Oanda, predicted that Bitcoin would go below $40,000 on Thursday. If BTC does not begin a new upward trend over $40,500, it may begin a new downward trend.

On the downside, there is immediate support near the $39,500 level. The first major support can be found at or near the $39,200 level. A breach below the $39,200 support zone could trigger another significant drop. The next significant support is near $38,500, and if the price falls below that level, it could continue down to below the $38,000 mark. The BTC/USD coin is trading near the 38,771.3 level and consolidating in the range between 38,300.8 and 41,104.6.

The reason for the ongoing downward trend in BTC could also be attributed to the downbeat sentiment in the crypto market, which tends to damage investor confidence. The declines in cryptocurrencies began after Russia’s central bank suggested a ban on the use and mining of cryptocurrencies on Thursday.As a result, Bitcoin (BTC/USD), the world’s most valuable cryptocurrency by market capitalization, fell by more than 6%, sinking below the $40,000 threshold, with the last trading at midnight on Thursday at around $38,800. Meanwhile, US lawmakers are scrutinizing Bitcoin yet again, as concerns mount over the type of energy used in the power-hungry mining process.

Meanwhile, US lawmakers are once again examining Bitcoin as concerns about the type of energy utilized in the energy-intensive mining process grow. This news has yet to affect the price performance. As usual, the biggest critic has been anti-crypto senator, Elizabeth Warren, who reaffirmed her concerns about Bitcoin’s (BTC) mining energy consumption. On January 20, the House Energy and Commerce Committee held a hearing titled “Cleaning Up Cryptocurrency: The Energy Impacts of Blockchains.” Warren claimed in a statement that Bitcoin mining’s high energy consumption and carbon emissions might “erase much of our progress to address the climate crisis.”

Elsewhere, the weakness of the broad-based US dollar, triggered by inflation fears, was seen as one of the key factors that helped limit the losses in BTC/USD. In Asia, the broad-based US dollar was down on Friday morning. Fears that inflation will remain high and that the Federal Reserve will tighten monetary policy in the United States soured the market sentiment, causing the safe-haven Japanese yen to gain ground against the riskier Australian dollar.

The US Dollar Index, which measures the value of the US currency compared to a basket of other currencies, fell by 0.06 percent, to 95.665. In the late hours of trading on Friday, US stocks suffered a strong selloff, while Asian counterparts were also down. As a result, treasury yields in the United States have fallen from multi-year highs. On the other hand, rates in the United States rose, due to market expectations that the Federal Reserve will tighten monetary policy sooner than expected.

During Friday’s Asian trading day, the price of Ethereum failed to put a stop to its early-day bearish moves, drawing further offers near the $2,900 level. Ethereum has continued to fall below the $3,000 support level. In the short term, the price of ETH may continue to drop towards the $2,650 support level. Ethereum has begun a significant slide after failing to gain strength above the $3,250 barrier.

There was a significant drop below the $3,120 and $3,050 support levels. The price even plummeted below $2,900, trading as low as $2,808. It is currently consolidating losses above $2,800. There is some initial resistance near the $2,900 level. If Ethereum does not begin a recovery wave over $2,900, it may decline.

On the downside, $2,820 serves as an initial support level. The first major support has formed at the $2,800 mark. On the downside, a breach below $2,800 could signal the start of yet another steep fall. The next big support for the bulls may be found near the $2,650 level. Any further declines could drag the price below $2,500. At the time of writing, the ETH/USD coin was trading near the 2,846.27 level, and consolidating in the range between 38,300.8 and 41,104.6.

However, the selling trend in Ethereum, the world’s second-largest cryptocurrency, could be tied to the risk-off attitude in the crypto market. The fact that Bitcoin has dropped to its lowest level since August proves this. Bitcoin (BTC/USD), the largest global cryptocurrency by market capitalization, fell by more than 6%, dropping under $40,000 to trade at around $38,800. The fall came after Russia’s central bank recommended a ban on the use and mining of cryptocurrencies on Thursday. As a result, cryptocurrency prices plummeted overnight, with Bitcoin reaching its lowest level since August last year. According to Kraken data, Ether ETH/USD, which runs on the Ethereum blockchain, fell by 7% to $2,868, while XRP/USD lost 6.25 percent, Bitcoin Cash BCH/USD shed 6.73 percent, Litecoin LTC/USD came down by 6.76 percent and Monero XMR/USD  by 5.21 percent, all of which were significant losses.

On the other hand, the recent selling tendency in the dollar is aiding the ETH, and reducing its losses. For example, the broad-based US dollar was lower in Asia on Friday morning. Fears that inflation will remain high and that the Federal Reserve will tighten monetary policy in the United States dampened investor sentiment, causing the safe-haven Japanese yen to gain momentum against the riskier Australian dollar. The US Dollar Index, which compares the value of the US dollar to a basket of other currencies, has fallen by 0.06 percent to 95.665.

The LTC/USD currency pair could not reverse its early losses, and it remained well-offered near $124.600. Litecoin was trading at $124.600 on Friday, which was down by 10.04 percent on the day. This was the biggest percentage drop in a single day since December 4, 2021. Litecoin’s market cap fell to $8.741 billion, or 0.47 percent of the overall cryptocurrency market cap, as a result of the decline. Litecoin’s market capitalization peaked at $25.609 billion. Litecoin has traded in a range from $124.000 to $131.000 over the last twenty-four hours, having lost 9.35 percent of its value in the previous seven days.

In the twenty-four hours leading up to the time of writing, the total traded volume of Litecoin was $801.998 million, or 1.19 percent of the total cryptocurrency volume. In the last seven days, it has moved within a range of $124.0000 to $153.5000. Litecoin was still down by 70.33 percent from its all-time high of $420.00 on December 12, 2017.

Since the start of the day, the crypto market has been flashing red, and it looks like the week will close on a gloomy note, with Russia’s central bank proposing a ban on the use and mining of cryptos on Thursday. Russia is one of the most popular Bitcoin mining countries in the world. According to Oanda’s senior market analyst, Edward Moya, the proposal by the Russian bank might cause Bitcoin to plummet below $40,000. Meanwhile, US lawmakers are once again focusing on Bitcoin, as concerns about the type of energy utilized in the energy-intensive mining process grow.

On the bright side, the recent bearish trend in the US dollar is helping the LTC/USD pair to decrease its losses. As the rally in US Treasury yields stalled, the dollar took a breather from recent gains, but it was still on track for its best week in two months, against a basket of global peers. Market concerns that the US Federal Reserve will tighten monetary policy more quickly than expected will drive the rise in US yields. A rate hike in March is fully priced into Fed funds futures, with a total of four hikes in 2022. Starting Tuesday, the Federal Open Market Committee (FOMC) will hold a two-day policy meeting, after which the market players will carefully examine the committee’s statement on tightening monetary policy.

Furthermore, the recent announcement that Walmart is aiming to become involved in the growing world of non-fungible tokens (NFTs) and will be revealing its cryptocurrency in the coming months, halted the losses in LTC. This news is wonderful, because it indicates that cryptocurrency is becoming increasingly mainstream and acceptable in daily commercial endeavors. As the sector expands, becomes stronger and begins to appeal to more individuals and traders, traditional corporations, stores and brick-and-mortar businesses are venturing deeper into what was formerly a strictly speculative space.

One of the main causes of Ripple’s bearish rally could be the market’s risk-off mood. The latest negative news from Russia and the United States weighed heavily on the cryptocurrency market. It should be noted that Russia’s central bank has suggested a ban on the use and mining of cryptocurrencies. On the other hand, concerns over the type of energy used in the energy-intensive mining process have prompted a new round of investigations by US senators. Conversely, the continuing selling bias in the dollar is assisting the XRP/USD in regaining some of its losses. For example, on Friday morning, the dollar was weaker in Asia. However, fears that inflation would continue to rise and that the Federal Reserve would tighten monetary policy in the United States soured the market sentiment, causing the safe-haven Japanese yen to gain momentum against the riskier Australian dollar. Alternatively, the losses in the USD could be short-lived, since market uncertainty tends to bolster safe-haven assets, like the US dollar.