The world’s top cryptocurrency by market cap, Bitcoin, has hit the $18,000 mark and is still dropping. Bitcoin has dropped by 6 percent in 24 hours, and even further over the course of the week.
BTC/USD reached the $19,000 triple bottom support, when it fell from $20,000 – $18,000. It signaled a selling mood among Investors.
Bitcoin hits $18,000
There are several reasons for Bitcoin’s bearish run, but most refer back to the Federal Reserve’s aggressive approach to inflation.
- Rising Bond YieldsThe US 10-year yield on bonds has increased by 3.25% in the last six months, while sell-offs have continued to rise. As a result, investors are choosing to play it safe. Thus they are avoiding the more volatile assets like Bitcoin, which is putting more downward pressure on the digital asset’s price.
- Fed’s Hawkish Policies: Jerome Powell, head of the Federal Reserves, is staying true to his predecessor’s aggressive approach to inflation, raising interest rates. He isn’t going to let up on his commitment to strengthening the dollar in order to combat inflation. The dollar hit a twenty-year high at writing. This adversely affected the Bitcoin price. And last:
- Nord Stream1 Shutdown: Gas flow to Europe has been halted since Russia shut down the Nord Stream 1 pipeline. This is making Bitcoin trading difficult and has caused market panic.
Technology Equities are also falling
As the Fed continues to increase interest rates in hopes of building the dollar’s strength, tech equities are equally affected. Both NASDAQ 100 and S&P 500 are dropping in this general bear market. Investors are preparing to weather the spike in interest rates by avoiding riskier investments and removing all stocks options, including Bitcoin.Source: BTCUSD price chart via TradingView.com
Bitcoin’s Bearish Trend is likely to Continue
Bitcoin could recover up to $20,000. Bitcoin would be able to recover from $19,500 at that rate. That might not prove easy. It is feasible, analysts believe, if there’s a lot of demand.
Richard Heart, an influential crypto-industry figure is disagreeable. He believes that Bitcoin has some way to go before it rallies. According to him, the price of top cryptocurrency will be at least $11,000 before it starts climbing back. Bitcoin’s price is currently hovering at $19,000 as of this writing. This is an increase of 1.3%.
The anticipation for both the September 13th inflation report and the Ethereum mainnet merger continues to grow.
Featured image taken from Pixabay. Chart from TradingView.com