By The Numbers: Bitcoin Suffers Largest Single Day Drop Since March 2020
14 Juin 2022 - 07:02PM
NEWSBTC
The price of Bitcoin (BTC) has dropped by almost 30% in the last
7-days. The number one crypto by market cap dropped below critical
support as macro-economic conditions worsen for risk-on assets. The
general trend across global markets seems to point to the downside.
Related Reading | Bitcoin 3-day Chart Indicates March 2020
Crash Recurrence At the time of writing, Bitcoin trades at $22,400
with a 4% loss on lower timeframes. The downside price action is on
pair with losses last seen in March 2020. At that time, the crypto
market and traditional market crashed due to the spread of COVID-19
and the lockdown measures imposed by world governments to slow it
down. The two-year pandemic shutdown economic activity for certain
sectors favored the increase in global liquidity. The latter was
caused by central banks around the world. In order to prevent the
global economy from crashing, these financial entities expanded
their monetary supply. Thus, there was more money to buy things. A
portion of this money fled into the crypto market, and what once a
March 2020 crash became a March 2021 rally when the price of
Bitcoin soared beyond $40,000 on route to an all-time high at
$69,000. As BTC’s price and other risk-on assets trended to the
upside, and central banks printed more money, inflation skyrocketed
and reached a 40-year high on the U.S. dollar. The U.S. Federal
Reserve (FED) is trying to stop inflation, and risk-on assets are
paying the price. According to trading desk QCP Capital, the
current downside price action was triggered by inflation surpassing
expectations from market participants and increased fear as the FED
could turn more aggressive on its monetary policy. As QCP claimed,
the FED has been hinting at a hawkish approach, what’s going to
happen to Bitcoin and global markets if they decide to deliver it?
The S&P 500 and the Nasdaq index are already trading at
support: There are talks of a 75 bps hike at the FOMC meeting this
Wednesday. Both the S&P and NASDAQ have also broken below last
month’s low. Bitcoin Impacted By Cascade Of Bearish News In
addition to macro-conditions, the crypto market seems to be taking
a hit from a series of bad news. The sector was barely recovering
from the Terra (LUNA)-UST debacle when Binance, Coinbase, and other
major companies. The latest was Celsius, the U.S.-based crypto
lender company which stop all withdrawals from its users. The
company apparently fell into insolvency as the price of Bitcoin and
other largest cryptocurrencies dropped below $24,000. Related
Reading | Ethereum Drops Below $950 On Uniswap Overnight –
Here’s Why In that sense, QCP Capital believes $20,000 will operate
as critical support for BTC’s price and $1,150 for Ethereum. If
these levels fail, the crypto market could reverse its two years
gains and return to its pre-COVID levels. This is already happening
in traditional markets.
Uniswap (COIN:UNIUSD)
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