Bitcoin just went down to below $60,000 yesterday due to volatilities in the market caused by external factors of the crypto market. 

The volatility managed to liquidate more than $400 Million in just under two days, which creates curiosity as to why this is happening. 

3 Reasons Why Bitcoin Went Down

There are three reasons why currently Bitcoin is going down, which might continue until the week is over because of uncertainties surrounding the financial market, as well as the crypto market. 

Geopolitical Tension Rising

The first one is the current conditions around geopolitical tension in the world, especially between Iran and Israel. 

After Iran retaliated with a drone strike, Israel is now plotting another attack which might cause many other countries to get involved. 

Several countries like Russia, China, and North Korea are on standby as their military is preparing to get involved if Israel attacks once more. 

This is because the only way Israel’s attack is possible is through the help of the US, where most of its military help came from. 

Currently, the US has said that it will not get involved if Israel attacks Iran again, however, government officials from Israel stated otherwise. 

Israel’s government officials have been rumored to be preparing another attack, this time on Iran’s nuclear facilities. 

However, Israel is currently nearing its debt ceiling, so if they were to attack, then the funds would probably come from another country, which is the US. 

This means that there is potential for higher tensions in the global economy since wars usually impact the economy negatively. 

If the war continues to escalate, then investor's confidence might continue to fall, bringing Bitcoin’s price downward, as well as other financial assets in the market. 

Macroeconomic conditions 

The second thing that makes it worse is the current economic conditions of economically advanced countries such as the US, due to the incompatibility of the government’s and central bank’s policy with the current condition. 

The Head of the US Central Bank, Jerome Powell, is an example of this chaos, where during his latest speech, he stated that inflation in the US is getting worse and is starting to get out of hand. 

This was the same statement that was said during the 2020 economic downturn, which worries investors that the US economy will go into a similar condition with that year. 

Also, Jerome Powell has stated that the US cannot rule out the possibility of a recession yet, which decreases investor’s confidence in the market. 

During economic recessions, investors tend to liquidate their assets, which is why if there are signs of one, selling pressure will start to boil up in the market, starting a downward spiral for riskier asset prices including Bitcoin. 

The current uncertainty around the US Economy is one of the biggest sentiments that might change the whole financial market. 

Since USD’s dominance is still prominent in the financial market as well as the global economy, the US economic condition will always play a huge role in determining the overall movement of assets, including Bitcoin. 

Halving Pattern 

The last thing is the internal factor of Bitcoin itself, regarding the Bitcoin Halving that will happen on April 20th, 2024. 

While it can bring a positive impact in the long run, Bitcoin tends to go down after halving, based on previous halving data. 

Looking at July 206, Bitcoin’s price went down around 15% after the Bitcoin Halving happened. Also, in May 2020, the price went up but back down again closing June’s movement with a 3% correction. 

This means that there is a potential for BTC to go down after halving, especially considering the current economic and geopolitical conditions of the world. 

Conclusion 

These are why Bitcoin’s price went down significantly in a short time, which is understandable since the overall financial market is going down with it. 

The only assets that are going up are assets that are considered safe havens, and since  Bitcoin is still categorized as a riskier asset, then it seems that in the short term, there is no potential for Bitcoin to go up drastically. 

Read Also:

Bitrue Official Website:

Website: https://www.bitrue.com/

Sign Up: https://www.bitrue.com/user/register

Disclaimer: The views expressed belong exclusively to the author and do not reflect the views of this platform. This platform and its affiliates disclaim any responsibility for the accuracy or suitability of the information provided. It is for informational purposes only and not intended as financial or investment advice.