In January, when it was announced that the U.S annual inflation rate had hit a 40-year high of 7%, Bitcoin dropped below the $40k level when the Fed reacted by stating it would raise interest rates for the first time in more than three years.
Less than a month later, the inflation rate has accelerated from 7.0% to 7.5%. The NASDAQ 100 ended the day with a 2.10% loss in response.
The downtrend has seemingly spilled over into the crypto market, with Bitcoin dropping by more than 4% over the last 24 hours. The reactionary price drop has sent Bitcoin crashing down from $45,661.17 to an inter-day low of $42,850.
Marginal gains over the last few hours now see bitcoin trading at $43,482 as of this writing.
The 24 hour price chart for Bitcoin (BTC). Source: Tradingview
With Bitcoin’s first major support level standing at $42,578, its price will look to reclaim $44,208 before retesting the resistance level at $45,161. Should the world’s leading digital asset fall below the support level, it could see Bitcoin spiral down to as low as $41,625.
The Broader Crypto Market Joins the Decline
The price plummet which started with Bitcoin has spread through the broader cryptocurrency market, with Ethereum losing 5% to drop to $3,097.4.
The 24 hour price chart for Ethereum (ETH). Source: Tradingview
Other Altcoins have recorded even bigger losses, with XRP and Polkadot (DOT) both showing at -9% over the last 24 hours to trade at $0.8193 and $20.5, respectively. Solana (SOL) is also trailed by 8% and is now trading at $106.15 at the time of writing.
As a result of the sudden downtrend, the global market cap has fallen by approximately 3% in valuation, dropping from above $2 trillion down to $1.943 trillion.
The 24 hour chart of the global crypto market cap. Source: Tradingview
On the Flipside
- In spite of Bitcoin’s pullback, the Bitcoin Fear & Greed Index has held strong at 50/100 – which signifies neutrality.
Why You Should Care
While this disappointing news ends Bitcoins winning streak, it demonstrates once again Bitcoin’s increasingly synced movements with traditional stocks.
Join to get the flipside of crypto
[contact-form-7]