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The world’s best cryptocurrency by market cap, Bitcoin, has hit the $18,000 mark and is still falling. The cryptocurrency has fallen 6% in the last 24 hours and more in the week before.
BTC/USD broke the $19,000 triple bottom support when it crashed from $20,000 to $18,000, signaling strong selling sentiment among investors.
Bitcoin reaches $18,000
There are several reasons for Bitcoin’s bearish run, but most refer to the Federal Reserve’s aggressive approach to inflation.
- Rising bond yields: US 10-year bond yields are up 3.25% since June as sell-offs continue to ramp up. Investors therefore play it safe. Thus, they avoid the more volatile assets like Bitcoin, which put more downward pressure on the price of the digital assets.
- The Fed’s Hawkish Policy: Jerome Powell, head of the Federal Reserves, remains true to his predecessor’s aggressive approach to inflation by raising interest rates. It doesn’t look like he’s about to slack off as he reiterated his goal of strengthening the dollar to fight inflation. At the time of writing, the dollar has hit a 20-year high, which is also negatively impacting the price of Bitcoin. And finally:
- Close Nord Stream 1: Since Russia closed the Nord Stream 1 pipeline, the gas flow to Europe has stopped. This has scared the market and is causing Bitcoin to go to the tank.
Tech stocks fall equally sharp
As the Fed continues to raise interest rates in hopes of strengthening the dollar, tech stocks are also being hit. Both NASDAQ 100 and S&P 500 are falling 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 bearish trend is likely to continue
The question is whether Bitcoin can recover to $20,000. At this rate, it should break through the $19,500, which may be difficult. Analysts believe it is possible if demand for the currency rises.
However, crypto influencer Richard Heart takes a different view. According to him, Bitcoin still has a long way to go before it recovers. He predicts that the top crypto will reach at least $11,000 before it starts to climb back. At the time of writing, the price of Bitcoin is hovering around $19,000, up 1.31%.
Meanwhile, anticipation continues to rise from the inflation report scheduled for release on September 13 and the Ethereum mainnet merger scheduled for the same day.
Featured image from Pixabay and chart from TradingView.com