Thursday trading sessions saw Bitcoin breaking beneath two crucial support barriers amid escalated bloodbath in the market. While its recent fall emerged because of a higher-than-anticipated US inflation stat, other factors send participants out of the crypto market.
Bitcoin lost approximately 15% over the previous 24 hours to change hands near $26,848. The world’s leading crypto explored levels last witnessed in December 2020. The crypto seemed ready to lose about 66% since its November 2021 record highs.
Nevertheless, the massive plummets might be sending BTC to its bottom. Renowned analyst Peter Brandt believes $27K could be a potential low.
US Inflation as the Downside Trigger
Bitcoin traded near $31K before the US Consumer Price Index reading yesterday (Wednesday). However, the leading crypto crashed to $28K minutes following the high-than-anticipated data.
Though the figures were slightly lower than March, they showed it might take longer to cool ongoing inflation. That would mean more rate increases by Fed, a highly pessimistic case for Bitcoin. The rate hikes by Fed early in the month also saw Bitcoin tumbling.
Bitcoin Follows Stock Market Crash
The stock market also sustained massive declines following the United Stated inflation statistics. The S&P 500 lost 1.7%, whereas NASDAQ Composite crashed by 3%. Remember, NASDAQ boasts a high correlation with Bitcoin.
As Bitcoin maintained a high correlation with the US Stock market in recent months, declines in the equity space spilled into the crypto. Also, Asian stock plummeted on Thursday, adding more downward pressure on Bitcoin.
Terra Slump Weakens Faith in Cryptocurrencies
The past week saw Terra blockchain sustaining historical declines in the crypto world. One of the top ten cryptocurrencies, LUNA, crashing by 99% (in a week) shook investors’ confidence in digital tokens. Meanwhile, the massive plummets in US and LUNA dented crypto market sentiment, contributing to the market-wide sell-off.
The crash in equity markets had sentiment towards risk assets like Bitcoin at lifetime lows. Though that might mean a ‘buy’ opportunity, the crashing pace in risk markets hasn’t slowed down. The market appears ready for more plummets, highlighting new lows.
Stay around for upcoming developments in the financial world.