Another Crash in the Books: Bitcoin Falls to $28K2 min readReading Time: 2 minutes
The bitcoin price has fallen further down, and the world’s number one digital currency by market cap has been part of a $1 trillion wipeout that has occurred across the crypto boards.
Bitcoin Keeps Tanking
Many digital currencies – including bitcoin, Ethereum, BNB, and Solana – have fallen well below their latest all-time highs. Bitcoin, for example, during the moments this article was composed, dropped to about $28,000 per unit. This is roughly $40,000 less than where the currency was trading in November six or seven months ago. This also constitutes a drop of about 12 percent in the last 24 hours and about $20,000 less than where it was in early and mid-April.
While it can be assumed that this is part of a correction (after all, 2018 – arguably the worst year in crypto up until now – occurred just after 2017, which was at one point considered crypto’s strongest point), the fact remains that things are down just about everywhere. The Nasdaq and the S&P 500 have also seen heavy dips in recent weeks, suggesting more than ever that the correlation between stocks and bitcoin is thick and visible.
Things got off to a very rocky start recently when Terra USD – an algorithmic stable coin – lost its peg to the U.S. dollar (Live Bitcoin News recently produced an article about this). Since then, everything appears to be following in the asset’s shoes, including bitcoin which has often led the upward or downward charges we’ve witnessed in the world of digital assets.
Yuya Hasegawa – crypto market analyst at Bit Bank – explained in a recent statement:
Bitcoin continued to slide and closed below $30,000 for the first time since last July, although the fall did not trigger a large sell off and the price is trying to recover $30,000 in the Thursday Tokyo session. The price of bitcoin, however, could still fall due to the UST situation and worsening technical sentiment, but if the U.S. inflation continues to slow down, the macro environment will likely improve, and the price will bottom out.
Discussing inflation further, he mentioned:
U.S. CPI was a mixed result. Even though it exceeded market expectations, it showed a sign of slowing down thanks to lower energy prices. The result was not enough to completely wipe out the possibility of faster monetary tightening, but it was also not enough to strengthen that possibility as well. The market inclines to sell on that kind of uncertainty, and that is why stocks and crypto fell, but there is also a hope that inflation in the U.S. will continue to alleviate.
Inflation Could Be a Major Instigator
Will Hamilton – head of trading at asset management firm Trovio – also threw his two cents in, saying:
The past week’s turmoil has spread across markets globally as the reality of hawkish central bank policy and widespread inflation is realized.