What were the most complete reasons for the decline in the price of Bitcoin ?
The price of Bitcoin failed to cross the resistance of $67,000 the previous day and has decreased by more than 3% in the last 24 hours.
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It seems that the geopolitical tensions and the economic challenges of the US and China have strengthened the bearish sentiments of the traders.
In addition, the projects active in the digital currency market are worried about the pressures of the legislators.
According to Cointelegraph, the price of Bitcoin decreased by more than 2,000 dollars the previous day and reached the range of 64,000 dollars. It seems that the US stock market has been effective in reducing the price of Bitcoin. The correlation between Bitcoin and the US stock market has increased recently, and disappointing corporate earnings reports combined with the Federal Reserve keeping interest rates high are likely to have contributed to BTC’s decline.
Among the mentioned companies, we can mention Tesla, whose adjusted net profit decreased by 21% compared to the previous year. In addition, Chinese investors are not in very good conditions, and the slowdown in the country’s economic growth has worried many analysts. An analyst named “Kamikaz FIAT” noted:
| Factor | Description |
|---|---|
| Macroeconomic Conditions | Rising interest rates by central banks to combat inflation can make riskier assets like Bitcoin less attractive to investors. |
| Regulation | Uncertain or restrictive government regulations surrounding cryptocurrency can create fear and uncertainty in the market, leading to a sell-off. |
| Lack of Institutional Adoption | Widespread adoption by institutional investors remains limited, which could restrict significant growth in Bitcoin's price. |
| Competition from Other Cryptocurrencies | The rise of other cryptocurrencies with various functionalities can draw investor interest away from Bitcoin. |
| Energy Consumption Concerns | The high energy consumption required for Bitcoin mining raises environmental concerns, potentially impacting its long-term viability. |
| Negative Events | Security breaches on cryptocurrency exchanges or hacks related to Bitcoin can erode investor confidence and trigger price drops. |
| Market Volatility | Bitcoin's inherent volatility can lead to sudden price swings, making it a risky investment for some. |
Some other analysts believe that geopolitical tensions in the Middle East are still effective in the digital currency market. However, establishing direct cause-and-effect relationships for such events is challenging.
The news about the digital currency market is not very interesting. Exchange-traded funds do not have significant inflows on the spot bitcoin exchange, and traders are concerned about their underinvestment and bullish impact. In addition, it was revealed the other day that Chang Peng Zhao, the founder of Binance, may be sentenced to 36 months in prison. UniSwapLabs is still embroiled in a lawsuit from the US Securities and Exchange Commission, and many other projects fear increasing pressure from regulators.
The US Department of Justice has accused Keonne Rodriguez, CEO of Samourai Wallet, and William Hill, its chief technology officer, of money laundering and setting up an illegal business. The publication of this news also had a great impact on the price of Bitcoin.