The world’s top cryptocurrency by market cap, Bitcoin, has hit the $18,000 mark and is still dropping. The crypto has dipped by 6% within the last 24 hours and more in the previous week.
BTC/USD breached the $19,000 triple bottom support when it crashed from $20,000 to $18,000, signaling a major selling sentiment 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 Yields: the US 10-year bond yield has risen 3.25% since June, as sell-offs continue to increase. Investors are playing it safe as a result. 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. It appears he is not about to slack off as he reiterated his goal of strengthening the dollar to fight inflation. At writing, the dollar has hit a 20-year high, adversely affecting the price of Bitcoin as well. And finally:
Nord Stream 1 Shutdown: Since Russia closed off the Nord Stream 1 pipeline, gas flow to Europe is on hold. This has scared the market and is causing Bitcoin trading to the tank.
Tech Equities Are Equally Dropping
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. All stock options and Bitcoin are becoming off-limits as investors prepare to weather the interest rate spike by opting out of riskier investments.
Bitcoin’s price surpasses the $19,000 level again after some positive bricks in the last couple of hours. Source: BTCUSD price chart from TradingView.com
Bitcoin’s Bearish Trend is likely to Continue
There is a question of whether Bitcoin can recover to $20,000. At this rate, it would have to break across the $19,500 mark, which might be difficult. Analysts believe it is possible if demand for the coin soars.
However, crypto influencer Richard Heart is of a different opinion. According to him, Bitcoin still has a long way to drop before rallying. He predicts that the top crypto will at least hit $11,000 before it begins to climb back. At the time of writing, the price of Bitcoin is hovering around $19,000, up 1.31%.
Meanwhile, anticipation continues to increase from the inflation report scheduled for publication on September 13th and the Ethereum mainnet merge slated for the same day.
Featured image from Pixabay and chart from TradingView.com