Bitcoin faces 1-month lomws and is triggering the entire crypto market to plummet
Bitcoin has plunged down to US$19,000 once again and took the entire crypto market down with it. Major cryptocurrencies are trading in red at this point. Initially, Bitcoin recovered when it traded along the US$24k price floor, but then it plummeted down to US$23,000, and initially continued on its downfall. Meanwhile, Ethereum has declined down to US$1,400 even after all the excitements and speculations revolving around the ETH 2.0 upgrade. Reports depict that the two most popular cryptocurrencies have declined by over 40% in the past week, as both plummeted below their most critical price barriers. The crypto bloodshed is real and is now scaring investors, there are also several individuals who are looking forward to joining the crypto market while the prices are still low, but there are other investors who are scared to enter the crypto market and face further financial threats.
Data indicates that the cryptocurrency massacre is mainly caused due to the growing pressure from the macroeconomic forces, including the spiraling inflation and a succession of Fed rate hikes. The declining condition of the cryptocurrencies is triggering crypto firms to lay off massive volumes of employees, in fact, some of the most prominent crypto assets have filed for bankruptcy, while others face random solvency issues. When BTC peaked in November 2021, it constituted most of the crypto market’s capitalization. But as Bitcoin is repeatedly falling below the US$20k range, it is triggering panic and fear across the digital asset domain. This week already started with plummeting crypto prices, with Bitcoin declining by nearly 15%.
Bitcoin’s Current Decline is Triggered by the Fed
Bitcoin dipped to its one-month low right after U.S. Federal Reserve Chair Jerome Powell doubled down on stricter monetary policy at the central bank’s Economic Symposium. Powell indicates that riskier assets are constantly struggling amid aggressive inflation winds as the economic slowdown enhances. He also comments on the declining prices of all other altcoins. Somehow, the stock market’s correlation with the crypto market is also aggressively ravaging digital assets. Digital assets are still stalking the stock market, which makes it even more intertwined with mainstream macroeconomic factors. BTC’s declination from the US$50,000 mark was the first mark that made investors speculate that the crypto might not witness bullish price rallies this year, and after repeatedly declining below US$20k indicates a weakening future of cryptocurrency.
What does Bitcoin’s current decline mean for investors?
Those who have been investing in cryptocurrencies for a long period of time are quite aware of this volatility. If Bitcoin fails to clear the US$20,000 resistance zone, it could continue to decline further below. If BTC retains its US$19,000 resistance, its value could further plummet from its recent low. Its current movement points towards the US$15,000 range and this sharp decline might eventually trigger another round of crypto sell-offs. If the Fed continues to keep raising interest rates and leave them elevated to reduce the impact of inflation, it might soon reverse the coure of cryptocurrency growth and development. Lowering interest rates can act as triggers, pushing investors to get involved in the volatile digital asset domain.
Currently, Experts say, investors do not need to worry about the big dips. They recommend keeping cryptocurrency investments under 5% to 6% of their portfolio and positively steer clear of extremely volatile cryptocurrencies. Investors should design strategies that would not block their other financial goals.
Link: https://www.analyticsinsight.net/bitcoin-plummets-to-1-month-low-and-fed-spelled-this-drop/
Source: https://www.analyticsinsight.net
