Late Thursday (ET), the biggest cryptocurrency by market capitalization swiftly made up some of its lost ground and was last seen hanging around $20,040, down 7.7% over the previous 24 hours.
After hitting a record high of almost $69,000 in November 2021, bitcoin fell in price for the rest of that year and into 2022, starting the year of 2023 at about $16,600. At one point, Bitcoin was up more than 50% for the year to $25,000 after a strong surge that lasted until mid-February.
But since then, more motives have arisen for sellers. One of them questioned the U.S. central bank’s early 2023 claim that a disinflation trend had started because to a stronger-than-expected inflation report. The Federal Reserve itself has admitted this, with Chair Jerome Powell telling Congress earlier this week that much more work has to be done to get inflation back to its target of 2%.
Concerns about interest rates were compounded by Wednesday night’s failure of cryptocurrency-friendly institution Silver gate Bank. The U.S. Department of Justice transferred 49,000 bitcoin it had seized from the dark net marketplace Silk Road to new addresses on Wednesday as well, raising the possibility that the government would be interested in selling that size able stockpile shortly.
According to Joe Di Pasquale, Head of cryptocurrency fund manager Bit Bull Capital, “Silver gate is one of numerous variables in Bitcoin’s underbelly test. “The market is also worried about future interest rate increases by the FOMC and declining stock values, in addition to Silver gate. The SEC is also paying more attention to cryptocurrencies. In total, the market has tightened and tested support levels once more.”
Said Di Pasquale: “We expect it will test its support level under $20 K before advancing once more, as we have said since January. As the next significant level of assistance, we see $18,000.”