The price of Bitcoin (BTC) has been shaken by the loss of the key support level which is at the price level of $ 38,000. The BTC price for a while tried to hold on to the support level then started to have lost momentum on Thursday following concerns over the economic downturn and rising interest rates.
The BTC price has declined over 8% in the past 24 hours, hitting a 1-1/2 month low of around $ 35,000. The fall was also one of the worst declines so far in 2022. BTC was only able to be about 10% above its lowest level this year, which it faced in January.
The latest fall in the BTC price coincided with the fall in the US stock market. So far the movements of the crypto market are often in line with the movements of the stock market this year especially the major technology stocks in the Nasdaq Composite and the Nasdaq 100 index.
Decision -making among policymakers to raise interest rates has been the biggest concern for crypto and equity traders. The Federal Reserve has already raised interest rates twice this year, and is poised to raise them again to combat increasingly worrisome inflation.
The one -day BTC chart shows that the latest fall in tokens began during the opening of the U.S. market. Both the Nasdaq Composite index and the Nasdaq 100 were also down about 5% on Thursday.
Technology stocks are something that is sensitive to rate increases, thus it makes the future earnings of market players look less attractive. The upward momentum in the crypto and stock markets throughout 2021 is largely driven by low interest rates, which make it easier to borrow money and invest it in stocks as well as cryptocurrencies.
Central banks around the world are now racing to ease inflation at a higher rate. In addition to the Fed, the Bank of England along with Australia and India have also recently raised interest rates.
In the face of inflation and the recession, investors tend to choose assets that are more exposed to the real world such as commodities, utilities and consumer staples.
