Stocks, China and the dollar: 3 reasons why Bitcoin price is tanking below $40K
Bitcoin (BTC) has hit its everyman price since Feb. 8 and is struggling to maintain $40,000 — just is Elon Musk wholly to blame?
Cointelegraph takes a look at other factors working against Bitcoin bulls this calendar week as the market returns to levels that some thought would never appear again.
USD bounces off multi-calendar month lows
Tesla CEO Elon Musk bashing Bitcoin'southward energy consumption is the narrative of the moment everywhere, but some classic hurdles to fresh price gains are as well back this week.
Among them is the strength of the United States dollar, which is attempting to stage something of a comeback after a losing streak that began in tardily March.
At the time of writing, the U.S. dollar currency index (DXY), which measures the USD confronting a basket of trading partner currencies, had bounced off long-term support to reverse its downtrend.
DXY is traditionally inversely correlated with Bitcoin, and together with limp stocks, the atmospheric condition are right for tripping upward bulls' progress.
Nonetheless, Wednesday's DXY close was its lowest since Jan. 6.
Tech stocks run across trouble
Elsewhere in the macro picture, tech stocks are suffering — and that's also something that tends non to bode well for Bitcoin.
Post-obit a curious study by Reuters about Communist china allegedly banning further aspects of cryptocurrency commerce, stocks began to come up under pressure.
As Cointelegraph and many others noted, nevertheless, goose egg new has come from Beijing, and trade associations have sought simply to reiterate existing restrictions.
Among the disinterestedness losers, however, was MicroStrategy, the corporate Bitcoin whale, which lost 5.2% on the 24-hour interval.
The rout likewise afflicted Tesla in a somewhat ironic postlude to Musk's Bitcoin criticism. In addition to being relegated to the world's third-richest homo, Musk has presided over Tesla's BTC gains near entirely disappearing.
Classic "FUD"
In that location may be lite at the stop of the tunnel. A curious tradition shows that after a China scare, crypto markets tend to produce huge rallies.
When the country officially halted crypto trading in September 2017, Bitcoin and altcoins promptly shot to then all-time highs.
Copycat moves by other jurisdictions are likewise known for their lack of bite. These include Donald Trump's criticism from 2019 and Bharat's ban from earlier this year — something that is already being reconsidered.
"Figure out a fashion to participate in buying the dip. Notwithstanding you can," writer Jason Williams told Twitter followers.
"I've seen this play out earlier with Bitcoin so many times. Price down, news media piles on. FUD. Price downwardly farther. Then [lift off]."
Exchange inflows, which in the past 24 hours reached their highest since the March 2020 crash, captured the fear amongst traders.
"People are scared," analyst Lex Moskovski commented on the data.
Source: https://cointelegraph.com/news/stocks-china-and-the-dollar-3-reasons-why-bitcoin-price-is-tanking-below-40k
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