Bitcoin and Altcoins Drop Massively in Value Despite Upward Expectations

Despite news this week of inflation rates lower than expected, top cryptos failed to capitalize for longer periods, leaving many disappointed and causing a wave of liquidations. BTC dropped from over $70,000 last week to below $67,000 early this week.

With the inflation report released on Wednesday, it sharply rose back to about $70,000, only to fall again. It hit concerning lows of around $65,100 in a single hour on Thursday, dropping 2% from $67,000, leaving many holders and traders worried as they expected it to hold its own after inflation data was announced.

However, the asset’s price drop from late last week triggered massive selling action, keeping BTC from witnessing an upward rally even with the favorable inflation news. Its seven-day performance indicates a drop of over 7%. The sudden drop on Thursday flushed out about $180 million in leveraged BTC trades within the twenty-four hours leading to that day’s 2% drop in BTC price.

BTC also saw $870 million liquidated from leverage trades in the past seven days. US-based BTC ETFs, too, have observed tremendous outflows this week – about $226 million was drained out of these products on Thursday. Beyond BTC, top altcoins like SOL, AVAX, ADA, and others saw price drops between 10% and 20%. ETH went down to about $3,400.

At a macro level, speculative assets like cryptocurrencies are taking a hit after the government made announcements implying that interest rates will not drop in the coming months. Investors pull out of speculative assets and do not want to put money into them due to less favorable borrowing rates.

Of course, the entire crypto market takes a hit when BTC drops in value. Presently, the dollar is doing extremely well as European countries like France go through political uncertainty, driving a ripple effect through its financial system and impacting the Euro. A strong dollar value makes it harder for BTC to rise and thus prevents altcoins from flourishing as well.

Image by Mariakray from Pixabay

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