31
Aug

Bitcoin’s Price Slides, Stocks Down As Well

The stock market is down after Germany reported the worst inflation in the past 50 years. In a move that wasn’t that surprising, Bitcoin fell just as sharp as stocks. While it was developed to be independent from stocks and other commodities, recent months have shown that it moves right with the stock market, especially when it comes to technology stocks.

It fell below $20,000 for the first time in a couple of months for a while on Monday. Fears resulted in major sell-offs as traders moved to protect their assets. It didn’t last long, and Bitcoin managed to find its way back to $20,000. But, it couldn’t get past it, currently trading for just over that price. If the past month has shown progression as the leading cryptocurrency went at the $25,000 price post, this one has shown regression to the dismay of traders and investors.

The World’s Economic Shape Harms the Crypto Market

It’s no wonder that the world is currently in the middle of a financial crisis. Scratch that – we haven’t even begun to feel its effects. In the wake of the Russia-Ukraine war, prices on commodities and oil have gone sky-high. Gas prices are jumping too, and with winter ahead of us, the world might see the biggest crisis in the past century. Of course, commodities are feeling the heat right now, and they’re harming the crypto market too.

Last week, Germany released a report for its harmonized inflation rate that has climbed to 8.8%. Analysts were expecting 9%, but the government obviously managed to tweak the numbers a bit. While the reports are below the expected numbers, the 8.8% inflation rate is still Germany’s highest in the past 50 years. Rate hikes will almost certainly be used to prevent inflation from going higher, and that could hurt the pockets of Germans. It’s clear that a financial crisis is looming on top of the energy crisis everyone expects this winter.

In the USA, there’s been continued tightness in labor markets, which is almost always a precursor for high inflation. Things aren’t looking good for the USA, no matter how strong the Dollar appears to be. Crude oil and natural gas prices were down over 5% and 2% respectively on Tuesday, and the crypto market followed. Almost everything is in the red right now, with only flashes of green and no major positive moves.

A Downward Trend

Bitcoin resumes a downward trend that has been going on for a while. There was a slight pause in the past month, but the trend continued right after. It is currently in oversold territory with the RSI (Relative Strength Index) falling down to 30. The 10-day moving average remains below the 50-day RMA, causing a moving average crossover that doesn’t bring any good news.

Where does that leave rest of the assets? Nowhere, to be honest. There haven’t been major positive developments regarding the price of Ethereum, Litecoin, or any other altcoin. Traders just need to hold their ground for the moment, and see what next month and the winter ahead bring.

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