Wall Street Times

Bitcoin witnessed prices slide down by 9% in the past week

Bitcoin witnessed prices slide down by 9% in the past week
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Bitcoin — The bitcoin market may be influenced by the status of the economy.

During times of economic uncertainty, investors may resort to alternative assets such as cryptocurrencies to diversify their portfolios and hedge against inflation.

As a result, demand for cryptocurrencies may increase, potentially driving prices higher.

When the economy is performing well, investors may be more confident in traditional assets such as equities and bonds, causing demand for cryptocurrencies to fall.

Furthermore, in a thriving economy, central banks may raise interest rates to combat inflation, which can be harmful to the cryptocurrency market since investors may shift their focus to high-yield savings accounts and other income-bearing assets.

Another factor that may have an influence on the crypto market is government regulation.

When governments impose restrictions or outright bans on cryptocurrencies, their value and adoption rates may suffer.

Governments, on the other hand, may boost the value and validity of cryptocurrencies by establishing more favorable regulatory regimes.

Overall, the economic climate and government policies have a significant influence on bitcoin market performance.

The Bitcoin situation

Inflation erupted in 2022, creating severe economic disruption.

Similarly, the cryptocurrency market was hurt, albeit multiple factors contributed to a significant drop in the price of several cryptocurrencies.

The market remained slow throughout 2022, but early 2023 saw signs of recovery, with numerous crypto assets making a comeback.

However, the honeymoon period may be over, as Bitcoin has began to plummet.

The crypto asset has decreased by more than 9% in the previous week, according to CoinGecko.

The current value of Bitcoin is $27,414.88 USD.

The collapse in BTC has nearly fully erased the cryptocurrency’s early April gains above $30,000.

Instead, it has fallen to around $28,500, which is much lower than the March closing price.

The downturn

While the value of Bitcoin has fallen, it is not alone.

Other big cryptocurrencies’ values have also fallen in the recent week.

With the exception of stablecoins, the bulk of the top ten most popular cryptocurrencies by market cap have declined by double digits.

One of the causes of the fall is the rise in the value of the US dollar.

At its next policy rate meeting in May, the Federal Reserve of the United States is expected to raise the benchmark interest rate by another quarter basis point.

With a rising dollar yield, investors may lose interest in non-yielding assets such as gold and cryptocurrencies.

According to Valkyrie Fund, Bitcoin has a stronger correlation with gold than traditional stock market indices.

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The debt ceiling crisis

Another factor impacting Bitcoin prices and the larger American economy is the debt ceiling issue.

The US Treasury has historically had a high level of debt.

The current debt surpasses the $31.4 trillion debt cap, and loans in excess of $31.46 trillion have already been made.

The United States debt ceiling is analogous to Congress placing a credit card limit on the federal government.

If the government’s spending exceeds the cap, it must ask Congress for an increase.

To reduce loan defaults and economic harm, the US government must balance its expenditure and debt, just as customers must manage their credit card debt responsibly.

However, in recent years, the issue of raising the debt ceiling has turned into a political battleground, with ideological splits and delays making financial markets unpredictable and volatile.

Failure to increase the debt ceiling could have catastrophic consequences for the United States and the global economy.

If they do not increase debt, the United States will face a new economic catastrophe when the government refuses to pay interest on US bonds.


The market’s concern was palpable, as the value of credit default swap contracts used to gamble against the US dollar hit levels not seen since 2008.

Several Bitcoin advocates feel that if confidence in the US economy declines, the price of Bitcoin will rise.

The market’s reaction to a global economic crisis, on the other hand, has produced uncertainty.

Small orders have also been utilized to compensate for a lack of liquidity.

According to Kaiko Data researcher Riyad Carey, two April 20 sell orders for $5.97 million sparked a negative breakout in Bitcoin’s price last week.

Carey stressed the hazards of “thin order books” and insufficient liquidity, which might lead to massive drops as a result of large orders of around 199.2 BTC, worth approximately $5.97 million at the time BTC was around $30,000.