Bitcoin’s price fell below $19,000 in just a few hours. The transaction history shows that Bitcoin was purchased by many addresses for greater than $25,000 To prevent losses from occurring again, these market players would liquidate all of their Bitcoin holdings. This would cause a drop to $16,000
Alerts about inflation affect the price
BTC lost almost half its value due to inflation fears and rates hikes by central banks (especially the US Federal Reserve) in the past month.
Bitcoin’s market valuation has fallen from $1.27 trillion in November 2021 to under $366 billion at present.
Jerome Powell, the chairman of the Federal Reserve, reaffirmed the Fed’s commitment to raising interest rates in order to reduce inflation. During the ECB meeting, he stated that inflation was more important to him than rising interest rates which could cause the U.S. to go into recession.
“Is there a risk we would go too far? Certainly, there’s a risk,” Powell said. “The bigger mistake to make – let’s put it that way – would be to fail to restore price stability.”
BTC/USD drops below $20k Source: TradingView
Powell stated that Powell believes that the Fed must quickly increase rates, as gradual increases could make consumers believe that higher commodity prices are not going away. Powell suggested that rates could be reduced before next year.
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Following Powell’s remarks, U.S. equity market futures declined, with those for the S&P 500 dropping 1.59% and those for the tech-heavy Nasdaq 100 losing 1.9%. Asian markets were down, with the Asia Dow index and Japan’s Nikkei 225 both down 1.54%.
The Data suggests that whales are still waiting
CryptoQuant data shows that the majority of traders wait for the next major price fall. However, price anticipation seems to be a temporary opportunity.
According to on-chain data, large whales may be waiting for the right opportunity to collect cryptocurrencies. This is not true of small and average traders. Data shows that, interestingly, whales’ holdings in Bitcoin are not now growing.
It is clear that whales await a better chance. Whales’ holdings between 100 and 1,000 and between 1,000 and 10,000 Bitcoins currently exhibit a flat line.
Similar reading: Bitcoin slides below $20K — Another collapse in the offing?| Bitcoin Slides Under $20K – Another Collapse In The Offing?
Pixabay's Featured image and Chart from Tradingview.com