Bitcoin has now dipped below the $40k price mark for the second time in the last two weeks. The crypto market is now fielding an overall downtrend with Bitcoin and Ethereum leading the charge as they continue to break crucial psychological price support base.
The bearish trend is not unique to the crypto market alone, rather the global finance sector is host to the net price decline. Forex and stock exchange have however taken the brunt of the global economic decline as the US dollar inflation concerns and the fed warning worsens market sentiments.
A general overwhelming underperformance of tech stocks was the theme of the stock and forex market over the last few days, the bearish initiative featured by the stock and forex market impacted the crypto market resulting in a snowball effect that has seen the totality of the global finance sector decline in real-time.
Bitcoin’s current price action in the crypto market is now beginning to show increasing similarities with risk-on assets in the forex and stock market.
The rising interest rates in traditional finance are currently capping the prospects of future profits for risk-on assets classes like the declining tech stocks and cryptocurrency.
Bitcoin Falls Concurrently With Featured Global Economy Decline
The world’s most valuable cryptocurrency has once again dropped below $40,000.
Bitcoin dropped by close to 10% in the weekly timeframe, it dropped by approximately 7% on Friday morning mirroring the features downward slide that is highlighted in all financial markets globally. Friday marks the second time Bitcoin’s price has dipped to breach psychological support at the $40,000 price mark in the last two weeks. Bitcoin traded at a daily high of $43,467 on Thursday, it has since fallen to its current price of $38,997.
Similar to Bitcoin, the second-largest crypto and leading altcoin, Ethereum has been brutally impacted in the last 24 hours. Ether’s price value has fallen by 8.5% on the daily timeframe, breaching its $3,000 critical price support region to trade for $2,879.
The bearish trend spearheaded by Bitcoin and Ethereum has impacted most of the crypto market. The alternative Layer 1 networks were impacted the most by the aftermath of the market-wide sell-off, they filled up the spots for top crypto losers in the industry. Other networks like the Harmony and NEAR network recorded new all-time highs( ATH) last week, however, their unique bull run was short-lived. As of now NEAR and Harmony have lost all their previous gains in price value with the former losing 12.8% and the latter 12% as a result of Friday morning’s dump.
The decline of the global financial market and the ensuing pessimism presumably facilitated Friday morning’s crypto market dip.
Financial Markets Decline
The forex and stock exchange markets continue to feature a steady decline in Friday’s trading session globally.
Tech stocks have underperformed the most, with Netflix losing over 20% after Thursday’s market close. Peloton, an exercise bike manufacturer saw its stock price dip by approximately 24.5% on Thursday after news about the company’s temporary discontinuation of its fitness products.
As of now, unfavorable market conditions and the increasing interest rates levied by the Federal Reserve are negatively impacting the volatility of risk-on assets. Despite Bitcoin’s uniqueness in the global finance space that saw it leverage its position as an inflation hedge to facilitate its 2021 boom, it now trades concurrently with other risk-on assets.
Should investors continue to opt for lower-risk investment options, the sell pull will continue to anchor the crypto market for a continual downtrend.
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