The drop of over 9% is the biggest that the bulls have had to contend with in the last 10 days.
Bitcoin (BTC) price reached its lowest in 10 days due to the American monetary policy and the Chinese regulations coming to play. In the early hours of Monday morning, 2:00 UTC, the price of the first and largest crypto by market capitalization Bitcoin (BTC) started experiencing a serious decline. The price had declined from $35,466 to $33,221. On Tuesday the asset is moving even lower, BTC was trading at $32,873.70 (-9.49%) at press time.
The drop of over 9% is the biggest that the bulls have had to contend with in the last 10 days, amidst the pressure to sell, thanks to a declined bullish momentum. Some Pundits and industry observers are pointing fingers at Chinese regulations and the crackdown on cryptocurrency mining. Already, some opinion leaders have had their trading accounts blocked, Weibo accounts being a good example.
Jehan Chu, the managing partner at Kenetic Capital, a Hong Kong-based Digital Currency investment firm, said that China has continued to exert pressure on the crypto industry by banning several Weibo accounts linked to industrial shapers. Weibo is a famous social media platform. He further added that is a sign that the Chinese authorities are tightening a noose on Crypto activities on the mainland.
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Other Contributing Factors
Besides the Chinese crackdown and attempt to regulate the cryptocurrency market, the market has also been affected by the Federal Reserve’s anticipated move, where it plans to stop its quantitative liquidity-boosting program. Although some notable investors like Skybridge Capital, whose BTC investment exceeds $310 million think otherwise. The company believes that in the event of such a move gold and digital assets, particularly cryptos will remain unaffected, thanks to their resilience.
US Monetary and Fiscal Policies Influencing Bitcoin (BTC) Decline
In the meantime, Deutsche Bank, the largest lender in Germany, has stated that America may be on the verge of experiencing the worst inflation ever, only comparable to the ones experienced in the 40s and 70s. Government spending and poor monetary policies were the primary catalysts for inflation. While the long-term American financial policies haven’t been affected, the macroeconomics and monetary policies are definitely causing jitters, Chu added. Investors have been exiting their trades in order to make entries when prices go lower as the American fiscal and monetary policies shape the market.
General Market Environment
In the past week, most cryptocurrencies traded in the red, with the largest by market capitalization having dropped by -7.3% and 12.8% in the last 24 hours. Polkadot and XRP took the hardest hits, having shed off 12.90% and 13.40% respectively.
Market influencers, particularly Elon Musk, have also been influencing the cryptocurrency market. Following a tweet that specifically targeted BTC in a negative way, BTC price fell after the tweet suggested that BTC had was on its knees and likely seeing its end.
Patrick is an accounting & economics graduate, a Cryptocurrency enthusiast, and a Blockchain technology fanatic. When not crafting informative pieces on any of the above subjects, he will be researching on how the Blockchain technology can transform the world, particularly the financial space.