Decrypting the Downtrend: Understanding Factors Behind Cryptocurrencies’ Falling Prices

  • Bitcoin’s Downswings
  • CPI Report Effects on the BTC Prices

Bitcoin’s Downswings

In the past 24 hours, Bitcoin prices have fallen by 0.37%, currently at $21,738.984. The highest value in the past 24 hours was $21,832, and the lowest was $21,460.09, with a trading volume of $22,685,661,267, representing 13.98%.

The BTC’s market cap stands at $419,211,799,558, a downward trend of 0.38%. The total BTC’s circulating supply at this report’s time is 19,290,431, which accounts for 92% of the entire Bitcoin supply.

In the past week, Bitcoin prices have fallen, hitting a low of $21,539.39 on February 10th, closing the day at $21,651.18. This value has decreased over the past few months since its all-time high back in November 2021.

There has been a downswing trend in the first quarter of 2023 since the beginning of January, signaling where the prices head. After achieving a local peak of $23919.89 on January 29th, the cost of Bitcoin displayed a bearish divergence and fell by around 11%.

BTC came close to the 200-day Exponential Moving Average due to the selling pressure (EMA). According to The Moon Carl, a well-known cryptocurrency analyst, and YouTuber, there are indications that the price of Bitcoin may turn bearish in the following days.

CPI Report Effects on the BTC Prices

A gauge of the average variation in prices paid by urban consumers over periods for a variety of products and services, including food, housing, transportation, and hospital attention, is the CPI (Consumer Price Index) Report.

The Bureau of Labor Statistics published it monthly and used it to gauge economic inflation. However, the prices are at a blink of volatility as January’s print is released later on Wednesday at 4:00 am EAT.

The volatility expected due to the report has raised concerns in the prominent market players who are busy anticipating prices of either $24000-$25,000 or a low of $20,000-$19,000, which are highly dependent on how far the results deviated from the projections that were made by experts earlier.

The month-over-month CPI rose from 0.1% to 0.5%, while the year-over-year CPI was to be 6.2%, down from 6.4% the previous month. As a result, core inflation will rise by 0.4% from the last month and 5.5% from the prior year, lower than the initial rate of 5.7%.

The elevated inflation in January might cause the US Federal Reserve to raise interest rates beyond their initial expectations and keep them elevated for a prolonged duration.

Some other factors that are in play in Bitcoin’s price rise or fall include the legal proceedings taken against the blockchain business Paxos and Binance’s BUSD stablecoin, which are just the start of US regulations.