Bitcoin, the largest crypto currency dropped below a support level in the past 24 hours. It has since recovered above $29,000. This drop was seen throughout the different chains, as the data has shown.
Following a positive response to the minutes released on Wednesday from the Federal Reserve meeting on May 3-4 , the S&P 500 added almost 1% and NASDAQ increased 1.91%. SToxx 600 and Germany’s DAX gained .4% on Thursday.
The agency’s flexibility on the plans to increase rates was shown by the minutes. Chair Jerome Powell said the Few would take an “aggressive” stance that traders were concerned would lead to inflation.
The Fed increased the US interest rate by a half a percent in May. Plans to reduce its balance sheet by $47.5 billion per month for the duration of three months in September are still underway.
“Inflation is much too high, and we understand the hardship it is causing,” Powell said at the time. “We’re moving expeditiously to bring it back down.” At the time, the comments contributed to a fall in broader markets and spread to crypto.
Inflation has increased to its highest in 40 years. Bitcoin traders have tried to stay on top of the rise in inflation because it is an asset seen by most as a hedge against rising consumer prices.
Bitcoin remains bearish, though, and has been on a losing streak for the past 8 weeks, making history as it has not seen losses like this in its lifetime. What’s worse is that traders seem to be positioning themselves for more drops as time goes on, according to futures and options data.
More volatility in the market could be expected as some analysts have pointed to BTCs current price in the range of $29,000-$30,000 could be breached in the near future.