By: Joshua Aldio, Business Associate
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Bitcoin dropped below $30,000 for the second time this week after new inflation data shows consumer prices have remained at 40-year high. The price of Bitcoin was last down 7% at $29,135.00, according to Coin Metrics. Earlier in the day it dropped as low as $29,026.66, its weakest point since December 2020. Ether fell 10% to $2,104.15.
Cryptocurrencies fell with stocks after the Bureau of Labor Statistics reported consumer prices for the month of April jumped 8.3%, which was slightly higher than expected by economists polled by Dow Jones.
This spooked investors, leading them to exit risk assets, including crypto. Cryptocurrencies remain highly correlated with the S&P 500 and, more recently, the Nasdaq Composite.
“The crypto market has been under pressure for some time now,” said Michael Rinko, venture associate at AscendEx. “The Fed keeps hiking, so equities keep going down and crypto’s been going down along with it. Generally that’s created a lot of fear in the market.”
This is the second time this week Bitcoin has fallen into the $29,000s range. Analysts have called $30,000 a key level for the largest cryptocurrency by market cap, and said it could fall even further if it is unable to hold there.
This time last week, Bitcoin touched a recent high of $40,000 but quickly reversed the next day and has been steadily hitting new lows since.
Investors are also digesting big news from the Terra project, whose suddenly popular stablecoin TerraUSD crashed almost 100% at one point in the past week, breaking its $1 peg. The decentralized, algorithmic stablecoin is meant to be backed by a combination of digital assets, including Bitcoin.
Bitcoin Technical Analysis
Bitcoin’s price is breaking the bearish flag in the daily time frame. We foresee that the bearish movement will remain as the fundamental and technical move accordingly. The next target price of Bitcoin will be around $24,000 as it is the flagpole target of the bearish flag.
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