Recently, the bitcoin quote has dropped to its lowest values. Experts believe that such a rapid decline was caused by the negative economic background. Following the first digital coin, the entire cryptographic market collapsed. In today’s article, we will figure out how much the BTK exchange rate has sunk, what is the reason for the negative trend, and what crypto enthusiasts should expect.
On June 13, a sharp decline in the quotes of the first digital coin began. The popular lending platform Celsius Network announced the suspension of withdrawals. She explained her decision by extreme market conditions. Exchange and transfers between accounts were also blocked. This means that users cannot manage their finances. Their savings are temporarily frozen.
Against the backdrop of recent events, the cost of BTC fell to $23,000, while Ethereum quotes fell to $1,200. The total capitalization of the cryptocurrency market has decreased to $1 trillion. Some stock players are confident that the decline in quotes occurred regardless of the situation with the Celsius Network platform. The global cryptocurrency market is influenced by other factors that cannot be ignored.
Why did bitcoin fall? Analyst opinion
The market has entered a phase of active selling. There is a global drop in quotes on the stock exchange, but the US dollar remains at its previous positions. People tend to buy a reliable currency, which is considered the “American”. They go to “safe harbor”, fearing a further fall in prices. In addition, there is a possibility of an increase in the Fed’s interest rate. The American regulator can decide to fight inflation at any time.
International experts comment on the situation with bitcoin:
- A representative of the cryptocurrency platform FalconX confirmed that many market players are worried about macroeconomic indicators. The exchange environment is very “bubbly”, and the macroeconomics leaves much to be desired.
- The CDPQ pension fund drew attention to the difficult market situation. Representatives of this firm point out that in connection with the general recession, investors reduce risks on many investment assets.
Summing up, it is worth noting that the decline in the cryptocurrency market is due to the aggressive actions of the Federal Reserve System. On Friday, inflation rates jumped to a 40-year high, and on Monday, experts are already expecting interest rates to rise. Recall that on May 9, BTC fell to a record low. At the moment, the macroeconomic situation continues to cause irreparable harm to the cryptocurrency industry.
What will happen to the Bitcoin exchange rate?
The cryptocurrency market is experiencing a serious drop for several reasons. The global crisis against the backdrop of Russia’s military actions against Ukraine created the preconditions for a rapid depreciation. It is believed that the global situation will worsen for at least the next six months. As such, investors should not expect rapid growth in crypto assets.
Most analysts agree that the current recession will continue for several more months. Perhaps the bearish trend will change only at the end of 2023. The price of bitcoin could drop to $25,000 or drop below $20,000. A senior analyst at Esperio believes that market players will not see a healthy rise in BTC anytime soon. Most likely, the economic crisis will drag on for many months.
The world is waiting for the Fed to raise interest rates. Large financial companies raise their forecasts to 75 basis points. It is assumed that the key rate will rise by 1%. The Federal Reserve’s decision could have negative consequences for many high-risk assets, including cryptocurrencies. The Fed has recently made it clear that interest rates will rise by around 50 bp in July.
As a result of the economic crisis of 2022-2023, prices in the cryptocurrency market will be extremely unstable. At best, the value of the first digital currency and other financial assets will stand still or show a short-term increase. As soon as the global situation stabilizes, we can safely predict new highs for digital gold. The rapid growth of bitcoin is predicted only after 2022.