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Breaking News: Coinbase Confirms DOJ Investigation Following Major Security Incident

By The Numbers: Bitcoin Suffers Largest Single Day Drop Since March 2020

Reynaldo Marquez
Reynaldo Marquez
1 year ago
2 mins read
bitcoin btc btcusd

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The price of Bitcoin (BTC) has dropped by almost 30% in the last 7-days. The number one crypto by market cap dropped below critical support as macro-economic conditions worsen for risk-on assets. The general trend across global markets seems to point to the downside.

Related Reading | Bitcoin 3-day Chart Indicates March 2020 Crash Recurrence

At the time of writing, Bitcoin trades at $22,400 with a 4% loss on lower timeframes. The downside price action is on pair with losses last seen in March 2020.

Bitcoin BTC BTCUSD
BTC trends to the downside on the 4-hour chart. Source: BTCUSD Tradingview

At that time, the crypto market and traditional market crashed due to the spread of COVID-19 and the lockdown measures imposed by world governments to slow it down. The two-year pandemic shutdown economic activity for certain sectors favored the increase in global liquidity.

The latter was caused by central banks around the world. In order to prevent the global economy from crashing, these financial entities expanded their monetary supply.

Thus, there was more money to buy things. A portion of this money fled into the crypto market, and what once a March 2020 crash became a March 2021 rally when the price of Bitcoin soared beyond $40,000 on route to an all-time high at $69,000.

As BTC’s price and other risk-on assets trended to the upside, and central banks printed more money, inflation skyrocketed and reached a 40-year high on the U.S. dollar. The U.S. Federal Reserve (FED) is trying to stop inflation, and risk-on assets are paying the price.

According to trading desk QCP Capital, the current downside price action was triggered by inflation surpassing expectations from market participants and increased fear as the FED could turn more aggressive on its monetary policy.

As QCP claimed, the FED has been hinting at a hawkish approach, what’s going to happen to Bitcoin and global markets if they decide to deliver it? The S&P 500 and the Nasdaq index are already trading at support:

There are talks of a 75 bps hike at the FOMC meeting this Wednesday. Both the S&P and NASDAQ have also broken below last month’s low.

Bitcoin Impacted By Cascade Of Bearish News

In addition to macro-conditions, the crypto market seems to be taking a hit from a series of bad news. The sector was barely recovering from the Terra (LUNA)-UST debacle when Binance, Coinbase, and other major companies.

The latest was Celsius, the U.S.-based crypto lender company which stop all withdrawals from its users. The company apparently fell into insolvency as the price of Bitcoin and other largest cryptocurrencies dropped below $24,000.

Related Reading | Ethereum Drops Below $950 On Uniswap Overnight – Here’s Why

In that sense, QCP Capital believes $20,000 will operate as critical support for BTC’s price and $1,150 for Ethereum. If these levels fail, the crypto market could reverse its two years gains and return to its pre-COVID levels. This is already happening in traditional markets.

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Reynaldo Marquez
Reynaldo Marquez

Reynaldo Marquez

A literature major, Reynaldo Márquez has been deeply immersed in the crypto industry since 2017. His journey began with translating articles for various crypto news outlets, a role he took on with zeal. In 2018, amidst a challenging market, he embraced his first writing assignment, demonstrating his unwavering commitment to the nascent industry and the promise of change it bears for many people worldwide.
In March 2021, he joined the prestigious crypto news outlet NewsBTC and Bitcoinist, where he not only reported on the latest crypto news but also had the privilege of interviewing some of the industry's most influential figures. A year later, his dedication and hard work were recognized, and he was promoted to Managing Editor, a position he currently holds with pride.
He believes in honesty, good communication, hard work, and the power of cryptocurrency and its potential to transform people's lives, especially those alienated by the legacy financial system. Born in 1992 in Venezuela, Reynaldo is familiar with how governments and central banks can negatively affect people, their everyday lives, and their futures by creating inflation and erasing their hopes for a better future. Thus, like many Venezuelans, he embraced this new technology to help him and his family navigate difficult times.
In another life, Reynaldo would have pursued a career as an investigator, most likely tracking down the origins of the Cyberpunk movement with the publication of William Gibson’s ‘Neuromancer.’ The intersection between fiction and reality, with the materialization of Bitcoin in 2009, would have allowed him to dive deep into the crypto sphere as something more than a financial phenomenon but also a cultural shift in society that was brewing since the XX century, and maybe even sooner, in the XIX century with the publication of Henry David Thoreau’s ‘Civil Disobedience.’
But that’s for another life. In this one, Reynaldo has been trading to improve his trading skills. Since 2023, he has been trying to learn Python to create successful strategies and find ways to execute them. It is a difficult task, which continues to keep him busy today and will most likely continue to keep him busy in the near and long term.
In his free time, he enjoys lifting heavy objects, reading, watching movies, and listening to his favorite music. Some of his favorite authors are Walt Whitman, William Faulkner, Allen Ginsberg, James Baldwin, Raymond Carver, Ray Bradbury, George Orwell, Mario Vargas Llosa, Reinaldo Arenas, Rafael Cadenas, and many others. Lately, he has been primarily interested in reading about dystopic societies, a topic that deeply resonates with the crypto industry.
Since 2023, he has lived in Spain with his wife. He loves the weather, the food, and the people and their culture. They both expect to travel much more within the country they now call home and beyond its border. He hopes to retire with his wife, maybe in a quiet place near a beach, but most likely in a city close to a library and a university with his kids and, hopefully, grandkids.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality
Created by industry experts and meticulously reviewed
The highest standards in reporting and publishing
How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Ad discliamer

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