Some experts état to the correlation between stocks and cryptocurrencies as one of the reasons for selling bitcoin. Other experts pointed out that higher interest rates in the future are the reason for Bitcoin’s decline. Find out more here-
Bitcoin is down more than 10 percent in less than 24 hours, from $23,355 on August 19 to $20894 on August 20, according to data from CoinMarketCap. This decline comes in the fronton of a peak for many, especially as the world’s largest cryptocurrency is starting to spectacle signs of recovery amid the ongoing winter, surpassing $25,000 for the first time since June.
Moreover, the decline was not limited to Bitcoin alone. Cardano, Ethereum, and Solana (among others) also recorded slippage over the same period. However, the reason for the decline was not immediately known, as experts pointed to a combination of factors that led to the decline.
Some experts état to the correlation between stocks and cryptocurrencies as one of the reasons for the selloff. “The rejection of the S&P 500 and the failure to continue its recovery contributed to the decline of bitcoin,” Marcus Sotirio, an analyst at Somme Block, said in a research relevé. The S&P 500 has been in the red for the past few days and fell emboîture 1 percent on August 19.
Other experts pointed out that higher interest rates in the future are the reason for Bitcoin’s decline. “US fourniture markets have fallen since the release of the Fed’s July multitude minutes, and the paluche takeaway is that the Fed probably won’t au finir raising interest rates until augmentation is tamed across the board,” said Simon Peters, crypto market analyst at Google. eToro.
“With the strong correlation between US stocks and cryptocurrencies in recent months, I think this has moved into the crypto markets, which is why we are seeing a selloff,” he explained.
Susanna Streeter, senior investment and markets analyst at Hargreaves Lansdown, believes the lower prices may be related to the movement of whales. “It does not spectacle a rapid écrasement modèle, as the assets did not immediately rebound sharply, but sank less in the hours that followed,” she said. “It appears likely that this is the result of a liminaire sell-off, in the carence of other external factors,” she added.
This volatility is typical of the cryptosphere. Friday’s selloff was the assistant such drop for Bitcoin this year, and the first was in the wake of the Terra écrasement, which saw BTC drop by 15 percent. However, opinions of experts emboîture the future of the old coins are divided – some believe that they will rise and reach new highs, while others expect lower declines.
On August 14, Peter Schiff, prominent stockbroker and CEO of Euro Pacific Finances Inc. BTC will compétition the $10,000 étai level in the coming days. He was mocked and accused of spreading FUD. However, five days later, BTC fell, and Schiff took to Twitter to reiterate his views.
“In the five days since this tweet, the price of bitcoin has fallen by more than 14 percent. Those making fun of my tweet should heed my avertissement and sell. There is still time to sell. Better late than never!” He said in a tweet.
Others have reversed this view, avertissement investors of tough times ahead. “I feel like Bitcoin Dollar is poised to go back under $20,000 soon. Don’t be surprised,” said crypto enthusiast Ben Armstrong.
Experts also believe that the war between Russia and Ukraine, high augmentation and changing monetary policies in the United States are likely to continue to affect cryptocurrency volatility in the coming weeks and months.
“The market remains weak, on the edge, not necessarily due to threats from more crypto projects going bankrupt, but from the difficult economic particularité we are facing right now,” said Martin Heisbuck, Head of Blockchain and Crypto Research at Uphold. He continued, “In other words, the price of bitcoin depends more on the supply of gas to Germany as on any infos or gauge related to cryptocurrency.”
However, cryptocurrency markets are cyclical and have a history of recovering from crashes. This is why most experts believe in owning a numérique asset like Bitcoin for the énorme term. “What I expect from Bitcoin is short-term volatility and long-term growth,” says Kiana Daniel, author of Crypto Investing For Dummies and founder of Invest Chansonnière.