China's regulators, taking a tougher stance on cryptocurrencies, managed to partially explain this drop in bitcoin prices. However, Wall Street analysts believe that the new aggressive stance and statements of the US Fed on interest rates and monetary policy, as well as bond purchases, also play a key role.
According to Matt Maley, Chief Market Strategist at Miller Tabak, Bitcoin and other cryptocurrencies should grow on their own over the years. However, they were pushed up by the Fed's measures over the last period of time. In other words, Wall Street analysts think that the stock market is the only asset class that has outperformed itself because of last year's massive stimulus programs.
And since the Fed surprised investors on June 16 by announcing two potential interest rate hikes by the end of 2023, bitcoin prices have fallen by 16%, namely to the level of $ 32,000. Many market observers have suggested that the Fed is trying to reduce the heated asset prices.
Bitcoin's price declined and reached the $ 29,458 mark on Tuesday as traders continued to consider Jerome Powell's speeches.
In comparison to the all-time highs of $ 63,000 reached in mid-April, Bitcoin is down by almost 50%. The reasons for this were the measures taken by Chinese regulators against cryptocurrency mining in their country, as well as the negative tweets from Tesla's CEO Elon Musk about the harmful effects of bitcoin mining on the environment.
So now that Bitcoin is below the level of $ 30,000, traders are preparing for the next wave of sales.
According to the forecasts of Western analysts, if the price falls below this level of $ 30,000, it will be a very bearish factor from the viewpoint of technical analysis.
Thus, the level of $ 20,000, which many experts have recently pointed out, is not at all excluded. This will not mean that the bull market of cryptocurrency is over, instead, it will indicate that long positions can be gained from this price.
