Everyone in the world trying to find the answer to “Why is Bitcoin crashing?” or “Why is Bitcoin falling?” The cryptocurrency market has fallen to its lowest level in ten months. A further $130 billion has fled the sector throughout the weekend, pushing the market capitalization to $1.62 trillion. Bitcoin and Ethereum once again lead drops during Monday’s early Asian trading session.
The Federal Reserve hiked interest rates by half a point last week, and Wall Street responded with a stock market swoon. The crypto markets have mirrored the trend, declining by more than 10% or almost $200 billion in the same period.
Why is Bitcoin crashing?
According to Edward Moya, a senior market analyst with Oanda, crypto markets had long been highly correlated to indices such as the Nasdaq. He discovered that the technology-focused index has dropped 21% this year while Bitcoin has fallen 22%.
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Moya stated that confidence is low, and the asset has been mostly consolidating for most of this year: “Bitcoin is really stuck in a sideways news cycle where you’re just waiting for it to be calm on Wall Street, and then you’ll see more people confident in investing. I still think there’s a lot of long-term potential value here, but you have to be able to stomach this volatility”. Moya added that corporate and institutional investors are in a “wait and see mode”.
Why is Bitcoin falling?
- The cryptocurrency market as a whole has tumbled to its lowest value in ten months, at $1.6 trillion.
- Investors are flocking back to traditional assets as interest rates climb.
- Following a magnificent 2021, institutions have also cooled on bitcoin.
Some crypto investors, according to Chris Kline, co-founder of Bitcoin IRA, are evaluating different alternatives and “moving their money back to the dollar as a starting point before seeing what they’ll do from there.”
Cryptocurrencies are cyclical; what goes up must come down. Since the invention of Bitcoin more than a decade ago, there have been four distinct bull/bear markets. It’s possible that the current bear market will continue throughout the course of this year and into 2023, based on previous cycles. According to experts, BTC may fall to the mid-20K range and consolidate there for an extended period before experiencing any significant momentum.
