Bitcoin (BTC) has retraced significantly today, a day after recording an 8% gain in response to President Biden’s executive order. Bitcoin (and the entire crypto market) is currently under severe pressure. It has fallen more than 5 percent and fell below $40,000 levels. Bitcoin currently trades at $39,324 and has a market value of $745 billion.
Bitcoin slumps after gains
Bitcoin reversed direction, while the euro’s two-day rally came to a halt, as investors awaited the European Central Bank’s (ECB) response to the gathering storm of high inflation and poor growth.
According to TradingView data, the top fell to $39,000 during Asia hours, nearly reversing Wednesday’s 8 percent rise caused by US President Joe Biden’s crypto executive order.
Laurent Kssis is a director at CEC Capital and a specialist in crypto-exchange traded funds.
“Market dropped again around 1:30 UTC during the Asian trading on long liquidations washouts which are still dominating the leverage markets. Any potential of a pullback seems futile due to the selling pressures these liquidations create.”
The crypto executive order has boosted the cryptocurrency market. However, inflation concerns remain. Due to the geopolitical environment, the main focus of attention will remain on U.S. inflation. This is predicted to continue rising.
The Federal Reserve (Fed), historically, has been the largest influencer on the cryptocurrency market, while ECB rate decisions had very little or no effect. According to one observer, Thursday’s announcement is critical.
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Griffin Ardern is a volatility trader at crypto-asset management firm Blofin.
“At present, we already know that the Fed will raise interest rates, so no matter how the U.S. market changes, this thing will happen. The most considerable influence at the moment may be the hawkishness of the European Central Bank this week.”
Expect the ECB to announce its monetary policies decision Thursday, March 10th at 12:45 GMT. Christine Lagarde, President of the European Central Bank, will hold a press conference at 13:30 UTC, 45 minutes following the ECB’s policy announcement.
“Any unexpected move by the ECB could trigger a fall in the market,” Ardern added.
Trades in BTC/USD at $39k Source: TradingView
Last month’s 7.9% rise in US consumer prices was the highest in three decades. These rising inflation numbers have put significant pressure on the value of risky assets like stocks and Bitcoin. Bitcoin has seen significant volatility over the past months.
Bitcoin rose above $40,000 twice within the past month but has struggled to hold this high for very long. This volatility will likely continue, as the Federal Reserve of the United States has the ability to raise interest rates quicker than expected in the face of rising inflation.
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