Bitcoin (BTC) has been in dire straits for the past few weeks. Every time the currency makes an upward move, it is quickly followed by a major correction.
Over the past week, the price has dropped by more than 8%, and almost all altcoins are following with significant losses. What’s going on?
Why is the Bitcoin price falling?
A major factor behind Bitcoin’s recent price decline is the macroeconomic situation. The concerns stem mainly from new data on the US labor market, which points to a weakening. This has fueled fears of a potential recession, causing investors to turn away from risky assets like Bitcoin.
In addition, regulatory pressure plays a major role. A negative verdict in a lawsuit against Coinbase has further damaged confidence in the crypto market. The case between the US Securities and Exchange Commission (SEC) and Ripple is also still in the air, as there may be an appeal. These uncertainties are causing reluctance among institutional investors, which can be seen in the significant outflow from Bitcoin Spot exchange-traded funds (ETFs).
Finally, the technology sector is struggling with heavy losses. Many tech stocks have gone through major corrections, which is also affecting the crypto market. Fears of a “tech bubble” are growing, especially after the huge increases in stocks such as Nvidia, which rose by more than 1,000% in just two years.
Bitcoin cycle shows similarities with 2019 peak
When the long-awaited bull run will finally arrive is difficult to predict. What is striking, however, is that the current Bitcoin cycle bears strong similarities to that of 2019, according to an analysis by an analyst at blockchain analytics platform CryptoQuant.
The analyst points to the increase in BTC remaining in the same address for six months or less, which is very similar to the situation in 2019. Back then, it took Bitcoin around 500 days to recover and reach a new all-time high. So there is hope.
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Source: https://newsbit.nl/dit-is-de-echte-reden-achter-de-bitcoin-koersval-van-vandaag/
