on the crypto
The price of Bitcoin has dropped nearly 4,5% in the past 7 days. Going below $ 20.000, the decline may not be over and it may even get worse! Let's take stock of the situation and the potential direction of the market in the coming weeks!
A major fix for the king of cryptocurrencies!
Bitcoin is in the red and could last. Over the past month, the cryptocurrency leader has experienced a drop of more than 10%. After a green start in August, the asset is undergoing the full force of the macroeconomic environment. At the time of writing, one BTC is trading at one quotation of 18.890 dollars.
The US Federal Reserve raised interest rates by 75 basis points on Wednesday. It was a further increase to combat inflation, which is still very much present on the other side of the Atlantic, but also in Europe. Although some countries show signs of improvement, the situation remains tense for most economies.
In fact, inflation is 8,3% in the United States and 9,1% in the European Union. As a result, central bank policy rates are likely to remain high for many months to come. This only adds to the pressure on risky assets, the most important of which are cryptocurrencies. The ongoing war and the escalation of tensions, with the mobilization decreed by the Russian side, do not help the situation.
Since the beginning of 2022, Bitcoin has taken a hard hit. September is no exception and BTC has dropped more than 55% since the start of the year. It recently hit $ 22.500 just before the merger, but has since plummeted by more than 14%.
A fall far from over?
Most indicators seem to indicate a continuation of this downward trend. The general context also does not invite optimism. What will happen to Bitcoin and the cryptocurrency market now?
On the macro side, observers believe that the rise in interest rates will continue until mid-2023. By then, it is difficult to expect a recovery in the cryptocurrency market. The suspension of interest rate hikes is obviously conditional on a decline in inflation in the United States, where the Fed's goal is to bring inflation below 2%.
Energy prices are starting to slow, starting with oil, which has fallen in recent weeks. The latter had broken all records during the Russian invasion of Ukraine. A truce that bodes well for the global economy. Another optimistic factor is the drop in transportation costs from China. The latter is down for the first time since December 2020. A sign that should benefit many players in the global economy.
Towards a growing adoption of the blockchain?
If we focus on the cryptocurrency ecosystem, the good news has been building up in the past few weeks. The day before yesterday, the world's leading technology exchange, Nasdaq, announced the offer of a cryptocurrency custody service. An important and encouraging signal for the future of cryptocurrencies.
The short-term prospects are therefore nothing short of nebulous. However, the global context and recent announcements related to cryptocurrencies indicate a growing adoption of these technologies. Let's face it. Nothing is done yet and the blockchain industry is still in its infancy. However, the various announcements of involvement, partnerships and investments by large companies and institutional players bode well!
