Shortly after the inflation rates were published in the USA, the Bitcoin price was able to rise to up to 24,000 US dollars through a small bear market rally. Now Bitcoin is falling back to below $21,000.
Bitcoin price falls by almost 10 percent in a week
In total, the largest and oldest cryptocurrency lost about 4.5 percent in the last 24 hours. In the course of the week, BTC even lost around 10 percent and is currently trading at around 20,800 US dollars.
In the meantime, the rest of the crypto market has also declined again, so that the market capitalization of all cryptocurrencies has fallen back to below one trillion dollars.
However, compared to the strong sell-offs in recent months, the current price loss is not a cause for concern for most investors. This is also shown by a look at the Fear & Greed Index.
Bitcoin Fear &Greed Index / Source: alternative.me
Interest rate decision for Bitcoin course of importance?
Tomorrow, the world is looking at the US Federal Reserve (FED) again. Then the FED will announce by how many basis points (BPS) the key interest rate should be increased.
It is currently estimated at 75 BPS.
Recently, the ECB also announced an end to the zero interest rate policy and declared that it would raise the key interest rate by 0.5 percentage points. This step primarily affects financing. At the very least, negative interest rates are likely to become increasingly rare in the near future.
By raising the key interest rate, the central banks put an end to the loose monetary policy of recent years.
So far, the stricter monetary policy has mainly led to the fact that capital has flowed out of risk assets. This also includes cryptocurrencies. If there is no surprise in tomorrow’s FED meeting, this should only slightly affect the financial market as such, since predictable events are usually priced in beforehand.
Bear market continues
Furthermore, the events within the cryptocurrency sector are also important. Thus, the failures of Celsius and 3AC continue to be in the foreground, while other companies such as Voyager are still looking for a good solution for investors.
Recently, a lot of calm has come from a new technological point of view, which is why there are currently few reasons that could cause a major increase in the Bitcoin price in the short term.
However, one can take a positive view of the fact that the Bitcoin price was able to remain relatively stable after the car manufacturer Tesla had declared in its quarterly report that it had sold 75 percent of its Bitcoins.
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