Photo credit: www.cnbc.com
The ongoing challenges within the macroeconomic landscape, coupled with the fallout from the collapse of major players like FTX and Terra, have significantly impacted bitcoin’s valuation this year.
Recently, bitcoin’s price fell below the crucial $90,000 mark, driven by selling pressure in the equity markets as investors in the crypto space await a new catalyst to drive growth.
According to Coin Metrics, the value of bitcoin dropped by 6% to $88,519, with earlier trades seeing it dip to as low as $87,736.
This latest decline positions bitcoin nearly 20% below its all-time high, which was recorded on the day of President Donald Trump’s inauguration.
Steven Lubka, head of private clients and family offices at Swan Bitcoin, remarked, “The equities market has struggled in recent sessions, with many leading stocks declining significantly compared to the broader index. This turbulence in equities has inevitably spilled into the bitcoin and cryptocurrency markets. The absence of immediate catalysts, combined with ongoing pressure from the equity markets, fosters an atmosphere conducive to profit-taking and short positions.”
As of Monday, bitcoin’s value dipped below the notable $90,000 threshold.
The year began positively for bitcoin, propelled by optimism surrounding potential regulatory advancements anticipated from the new Trump administration that were expected to benefit the crypto sector. However, since the administration unveiled its long-awaited executive order regarding cryptocurrencies at the end of January—though received favorably by the industry, its less ambitious tone concerning a strategic bitcoin reserve was a disappointment—the market has lacked strong direction.
While there remains a belief that Trump’s policies could yield beneficial long-term effects for the cryptocurrency industry, current bitcoin momentum appears to be tightly intertwined with wider macroeconomic factors.
Lubka expressed his belief that bitcoin may conclude its current correction and begin an upward trend again by mid-March.
The $90,000 level serves as a lower boundary for the narrow trading range bitcoin has occupied since late November. Analysts caution that a significant drop below this threshold could trigger a more considerable retreat toward the $80,000 mark.
In broader market developments, other cryptocurrencies experienced even steeper declines on Monday. Both Ether and Solana’s sol token each fell by 9%. Additionally, the overall cryptocurrency market, as tracked by the CoinDesk 20 index, lost over 8% of its value.
Don’t miss these cryptocurrency insights from CNBC Pro:
Source
www.cnbc.com