The decline extends to all equity risk assets including international stock markets and it is due to the latest statements by the president of the Fed, Jerome Powell.
The official reaffirmed that the monetary entity will continue with a policy of increasing rates “for some time” with the aim of “restoring price stability.”
So far this year and to cool down the inflation numbers “which, after reaching a 40-year high of 9.1% in June, slowed down to 8.5% last month-, the entity arranged a rise in reference interest rates of 25 percentage points in March, 50 in May, 75 in June and another 75 in July, taking it from levels close to zero to a range between 2.25% and 2.50%.
Powell claimed that the “focus at this time” of the FED is that inflation returns to the goal of 2% year-on-year, even in spite of the fact that said process may have consequences in the economy of consumers and companies by making credit more expensive and discouraging investment.
In this way, Bitcoin, after exceeding $25,000 at the beginning of the month, began a fall that has accelerated in recent days, like other alternative cryptocurrencies such as Ethereum, which, in a matter of weeks, fell from $ $2,000 to $1,490.
Since November 2021 when it reached a peak of $67,617, BTC has lost more than 70% of its value while the capitalization of the entire cryptocurrency market has fallen from $3 trillion to $963 billion.
“Money is fleeing from risky assets. Cryptocurrencies are following the same adjustment as the US stock market“, Cici Lu, from the consulting firm Venn Link Partners, told the Bloomberg agency.
Analysts are now betting that bitcoin will hold in a range they place between $17,600 and $19,500.
what will happen in september
According to the analysts consulted by Cointelegraph, historically September was the worst month for the price of Bitcoin. Why is September generally a losing month in the markets? Cryptocurrency analyst Thomas Kralow explained to his more than 100,000 YouTube subscribers that the reason is as follows: In this period, investors abandon their assets after returning from their vacations. Of summer.
The analyst remarks that he does not know how relevant this is, but he has seen historically that September has been very volatile and negative. That is why he warns that we could have this scenario this month, to which he adds that the United States is in the middle of the elections. And he believes that all this it will drive a lot of price fluctuation for Bitcoin.
In order for September not to affect the cryptocurrency, he mentions that we need it to return to $20,000 and stabilize above that price. In this way, he believes that it will then go above US$21,800 to continue with the rally that he had been making.
Source: Ambito
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