The bitcoin price opened the week with a sharp turn of events. The cryptocurrency dived below $24,000 today, leaving many people surprised. A price that had not been seen since December 2020. After trading for a week around $30,000, bitcoin lost more than 20% this week as it headed further south in to record territory.
The price of the largest cryptocurrency in the world is currently sitting at or around $23,623.
Unsurprisingly, bitcoin’s collapse dragged the rest of the market into a sharp fall. While the vast majority of major digital assets recorded double-digit corrections, in just a few short hours more than $100 billion was erased from the total market capitalization.
This change brings the entire crypto market down to less than a trillion dollars, a level that had not been seen since February 2021. The Ethereum price also climbing down while currently sitting at $1,227.
Why is bitcoin price down?
Analysts said black Monday’s plunge came as global stock markets suffered sharp sell-offs, which closed down 3% on Monday, while Wall Street opened 2.3% lower.
Among those, bitcoin-backed funds suffered the most, with $57 million withdrawn last week. At the same time, Ethereum-backed funds recorded outflows of $40.7 million.
After the massive fall in the last trading hours, the outlook is extremely discouraging. Analysts seem resigned to a rapid recovery, and all agree that a period of negative trading conditions and constant difficulties within the market is approaching.
For example, in the last few hours many exchanges have slowed down their activity to avoid extreme settlements, an action that may encourage panic within the ecosystem and even encourage many investors to withdraw their funds.
The big market counterweight over the past few days was the new inflationary data in the United States. While the Consumer Price Index (CPI) has just reached 8.6% per year – consolidating its current level as the highest in the last 40 years – all markets are going through a period of uncertainty.
The Federal Open Market Committee (FOMC) of the Federal Reserve (Fed) will meet next Wednesday to determine what its monetary policy will look like in the coming months to try to curb inflation.
In the coming days it will be interesting to see how the market behaves, and to what stimuli it responds. Whales and large companies with strong stakes in the cryptocurrency ecosystem are sure to be looking for a key entry point from where they can buy the digital currency.
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