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Bitcoin dips below $21,000 as inflation continues to rise

Bitcoin dips below $21,000 as inflation continues to rise

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Answer Bitcoin dips below $21,000 as inflation continues to rise

Bitcoin price briefly dropped below $21,000 in the early hours of Tuesday morning, its lowest level in the past 52 weeks.

Bitcoin dropped to as low as $20,950, according to CoinMarketCap data, before recovering to its current price of around $21,000, down more than 4% on the day.

With a current market capitalization of $400 billion, Bitcoin is down more than 66% from its all-time high of $68,789 recorded in November 2021.

As we pointed out in Arab Bitcoin yesterday, Bitcoin is leading the liquidation process in the cryptocurrency market, liquidating a new $531.62 million over the past 24 hours, according to Coinglass data.

The Bitcoin Fear and Greed Index reached 8 out of 100, its lowest level since May 2022, indicating intense anxiety and fear in the market.

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Earlier today, Ethereum, the second largest cryptocurrency, fell to $1094, also hitting a 52-week low.

Ethereum is currently trading at $1,220, down 2% from the previous day.

Why did the bitcoin price collapse?

The main reasons behind the bearish price movements of Bitcoin in the recent period are the increasing global inflation rates and the interest rate hike by the US Federal Reserve.

Inflation in the US is at a 40-year high of 8.6%, but America is not alone.

Price hikes are a global phenomenon, with all important economies facing inflation.

Inflation increased in European countries including Germany (7.9%), France (5.25%), the Netherlands (8.8%) and the United Kingdom (9%) in May 2022.

Turkey is the hardest-hit country from the G20, with inflation rates exceeding 73.5%, according to data from Trading Economics.

The rising rate of inflation globally is fueled by rising fuel costs and the changing supply chain dynamics resulting from the Russo-Ukrainian war.

In order to control inflation, the Federal Reserve is expected to raise the interest rate by 0.75%, which in turn will significantly increase bond yields, according to the Wall Street Journal.

Read:Upbit hackers use a new strategy to launder stolen money

The Fed will hold a meeting to discuss this issue today, and an announcement is expected today if the planned rate hike is to be made.

Bitcoin’s decline and its decline to levels not recorded in 52 weeks made the total market value fall to the level of 900 million dollars.

Read also:

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