The crypto market has started 2023 positively, with the majority of cryptocurrencies landing in high trading areas. However, the market appears to have taken a U-turn as most currencies including Bitcoin, Ethereum, XRP, Cardano, Solana and other big ones posted losses. However, major altcoin Ethereum has lost $1,600 levels.
At the time of publication, Bitcoin is selling at $22,656 after falling 1.2% over the past 24 hours. Ethereum also fell 4.57% in one day and is currently trading at $1,553.
Why is the price of Bitcoin going down?
The last three weeks of January have been very positive for cryptocurrencies. Nonetheless, Bitcoin as a workhorse currency is currently showing a gradual downward trend that is considered highly unusual given its performance over the last few days. It shows that you are no longer optimistic about your actions.
It’s no secret that Bitcoin and other big cryptocurrencies are highly correlated with technology stocks. Hence, this is one of the reasons why Bitcoin and other cryptocurrencies record losses today.
Second, the cryptocurrency market may be reacting to Thursday’s release of US fourth-quarter Gross Domestic Product (GDP) figures.
Third, market experts point to hedge funds entering short positions. Next, crypto market volatility could be due to Microsoft’s cloud outage, which has affected investor sentiment. Finally, traders hoping for monetary policy easing over the next few days may have caused crypto market volatility.
However, next week’s Federal Reserve Board meeting is expected to give these cryptocurrencies a much-needed push if inflation remains subdued.
