Bitcoin, the world’s largest cryptocurrency by market value, is still falling, hitting $18,000. The crypto is down 6% in the last 24 hours and more in the last week.
BTC/USD has breached the $19,000 triple support as it fell from $20,000 to $18,000, indicating massive selling among investors.
Bitcoin reached $18,000
There are several reasons for Bitcoin’s bull run, but most of them trace back to the Federal Reserve’s aggressive approach to inflation.
- Increasing bond yieldsU.S. 10-year bond yields have risen 3.25% since June, as prices rose. As a result, investors are playing it safe. Thus, they are moving away from volatile assets like Bitcoin, which puts more downward pressure on the value of the digital asset.
- The Fed’s hawkish policiesFederal Reserve Chairman Jerome Powell has been raising interest rates in response to inflation. He did not seem to hold back as he reiterated his intention to strengthen the dollar to fight inflation. At the time of writing, the dollar reached a 20-year high, negatively affecting the price of Bitcoin. And finally:
- Shutting down Nord Stream 1: Because Russia closed the Nord Stream 1 pipeline, the flow of gas to Europe was stopped. This has spooked the market and is causing Bitcoin trading to tank.
Tech stocks are falling equally.
As the Fed continues to raise interest rates in hopes of bolstering the dollar’s strength, tech stocks have also suffered. Both the NASDAQ 100 and the S&P 500 are declining in this overall bear market. All stock options and Bitcoin are going off limits as investors prepare to deal with interest rates by pulling out of risky investments.
Bitcoin’s bearish trend may continue.
There is a question whether Bitcoin can recover to $20,000. At this rate, it will have to break at the $19,500 mark, which could be difficult. Analysts believe it is possible if demand for the coin soars.
However, crypto influencer Richard Heart has a different opinion. According to him, Bitcoin still has a long way to go before rallying. He predicts that the top crypto will reach at least $11,000 before starting a pullback. At the time of this writing, the price of Bitcoin is hovering around $19,000, an increase of 1.31%.
Meanwhile, expectations for the inflation report scheduled for publication on September 13 and the integration of the Ethereum mainnet on the same day will continue to rise.
Featured image from Pixabay and chart from TradingView.com