Bitcoin (BTC) fell 16% in value on Monday, bringing its market leadership below $23,000 for the first time since December 2020.
After the successful sell-off of Bitcoin to $25,000 on Monday, June 13 the sell-off continued to drag BTC to $23,000, putting the market in a state of panic.
Meanwhile, the sell-off in panic has sunk the cryptocurrency market’s total capitalization to the lowest level of $925 billion, marking a 58% loss. The bottom was bought to trigger an immediate surge to $1.041 trillion.
However, selling pressure seems to have subsided after a long period of falling prices. The total market capitalization is fluctuating close to the previous localized bottom line, at $947 billion. Weekend price action sees Bitcoin’s downward trend. But trading Asia on Monday morning caused a rapid decline, falling from $28,000 to $22,600 at its lowest point.
On Friday, the U.S. Department of Labor released May’s Consumer Price Index, which shows a 0.3% increase over the previous month, marking the 40-year high at 8.6%.
The news triggered an immediate sell-off on Bitcoin and the broader cryptocurrency markets, as investors sought to adopt more defensive positions amid the Fed’s likely further quantitative tightening.
Commenting on this, Alex Kuptsikevich, Senior Market Analyst at FxPro, said the CPI put additional pressure on the Fed to accelerate its hawker position.
“An extension of inflation to the 40-year high will attract public attention by the end of the week and will put pressure on the Fed. Regarding readability, such a high reading could trigger [the Fed’s] tougher stance in the accompanying commentary.”
It all causes trouble for Bitcoin and other risky correlated assets. But the question is how far BTC can go.
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