Bitcoin's trend is continuing to slowly decline, with the most popular cryptocurrency currently trading at around $27,500, showing a decrease of 9% as compared to last week. This dip in the crypto's price has resulted in the erasing of early April gains which lead to Bitcoin's value recently crossing $30,000. Other leading cryptocurrencies have also taken a hit during this time period and most of the top 10 market cap cryptos, excluding stablecoins, have seen double-digit drops in price.

The U.S. dollar's appreciation has been responsible for this downtrend, as it is expected that the American central bank will increase the benchmark interest rate by a quarter basis point during the upcoming May policy meeting. Since Bitcoin doesn't pay its investors any interest, its value lowers compared to higher-yielding currencies like the U.S. dollar. This has been the case lately and data from Valkyrie Fund points out that the Bitcoin-Gold correlation is greater in recent times than that of Bitcoin-stock market indices.

A debt crisis might also add fuel to the fire, as the United States is currently facing an out of control debt ceiling, exceeding the set limit of $31.4 trillion and a majority of Americans owe an estimated $31.46 trillion. If more debt is not added to the government's account then this situation could face severe crisis and U.S. bonds interest payments will be delayed. This fear was evident as the American credit default swaps contracts rose to 2008 levels.

Apart from the U.S. economy, low liquidity market is also becoming a concern. A researcher from Kaiko Data recently tweeted how two April 20 sell orders worth $5.97 million at a price when BTC traded for $30,000 triggered a bearish breakout in Bitcoin’s price. This indicates that lower fluidity can result in orders of small magnitude to push market prices in a downward trend.

In the end, while some blockchain experts are hopeful that the Bitcoin's price can be boosted in response to any potential American finances issues, there is a lot of speculation and uncertainty in the market due to various factors. Investors and traders need to be extra cautious in making their trading decisions in such volatile times.



Other News from Today