The cryptocurrency market’s fate doesn’t look to settle anytime soon as the bears are all geared up, dragging the global market down by 19.38% over the past day trading at $1.14 trillion and leaving the market to bleed.
This movement has bought the flagship currency below $27,000, one that was never seen in 16 months. At the time of reporting, Bitcoin Price is changing hands at $26,840 with a plunge of 12.3% over the last 24hrs.
Though the crash is directly in response to the increased US inflation rate, there are also other factors that have driven the market towards a bearish trend. Let’s look at the top three reasons for Bitcoin’s decreased price action.
- US Inflation
Yesterday, before the CPI data was out, Bitcoin was hovering between $30,000 and $31,000. But once the CPI reports were out which saw an increased inflation rate than expected, the flagship currency saw a drop below $28,000 within the minutes. This increased inflaship will see the Federal Reserve hiking interest rates even more.
- Bitcoin Follows Negative Stock Market Reaction
The US inflation rise had a drastic effect on the stock market as well as the S&P 500 dropped by 1.7% while Nasdaq Composite rolled down over 3%.
It’s a known fact that Bitcoin is closely related with the US stock market and thus, the losses that stock markets saw was also knocked on Bitcoin price as well, increasing the sell-off pressure on Bitcoin.
- Terra Blockchain’s Crash Sways Trust In Crypto
The Terra blockchain’s value saw a spike over the past week, but in just a few days the Terra’s LUNA crashed by 99% impacting investors confidence in crypto.
Though the Terra (LUNA) and its stablecoin UST price action is not directly related to that of Bitcoin’s, yet the investors sentiment will have a huge impact on the wider market.