Bitcoin Prices Fall Off a Cliff to Lows Since Late July – What Driven These Losses?

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Bitcoin prices plunged today, falling to their lowest level in more than three weeks, as many digital currencies and major US stock indices suffered losses.

The world’s most valuable cryptocurrency by market value took a steep dip earlier today, losing more than 5% of its value in less than 30 minutes, according to figures from TradingView.

Following this sharp decline, the digital asset continued to decline, hitting an intraday low of $20,876.80 around 7:00 PM EST, additional data from TradingView reveals.

[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]

At this point, bitcoin had fallen more than 10% in about 24 hours, and it was down more than 15% from its recent high of over $25,000 reached on August 15, additional trade data reveals. .

Risk-free trading

Explaining the digital currency’s latest losses, market watchers described a risky trading activity environment, in which cryptocurrencies and stocks suffered due to investor concerns over Federal Reserve policy. .

Central bank officials have raised benchmark rates several times this year, and an environment of higher borrowing costs could create headwinds for riskier assets like digital currencies.

Analysts contributing to this article pointed to recent communications from Fed officials, as many stressed the need to get inflation under control.

Federal statements

James Bullard, chairman of the St. Louis Fed and a member of the Federal Open Market Committee, said in a recent interview with the Wall Street Journal that he plans to support another significant benchmark rate hike at the next meeting. politics in September.

Central bank officials approved a 75 basis point hike in July, after headline inflation figures in the United States hit their highest level in 40 years the previous month.

“We need to continue moving quickly to a policy rate level that will put significant downward pressure on inflation,” he told the WSJ.

“I don’t really see why you want to extend interest rate hikes into next year,” Bullard added.

Mary Daly, president of the Federal Reserve Bank of San Francisco, also commented on the issue in a recent interview with Bloomberg TV, saying she was willing to support a 75 basis point hike at the next policy meeting.

Brett Sifling, investment adviser for Gerber Kawasaki Wealth & Investment Management, underscored the importance of the key role of these statements, noting that “investors are clinging to every word the Fed says.”

He also explained how these developments likely caused market participants to sell off their riskiest assets.

“With the reiteration of the commitment to lower inflation this week, people probably took the opportunity to unwind their positions,” Sifling said.

Joe DiPasquale, CEO of cryptocurrency hedge fund manager BitBull Capital, offered a similar take on the matter.

“Today’s steep decline is the result of market participants de-risking after renewed expectations regarding the FED’s hawkish treatment.”

Going forward, scrutiny of central bank communications by investors will continue, predicted Armando Aguilar, an independent cryptocurrency analyst.

“All eyes will be on the Fed’s annual symposium in Jackson Hole, WY next week,” he said.

Disclosure: I own bitcoin, bitcoin cash, litecoin, ether, EOS, and sol.

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