After showing flashes of brilliance early in the day, Bitcoin price is now firmly trading under $80K amid fears for a steeper drop. The drop in prices follows the release of US economic job data as Bitcoin (BTC) finds its bearing amid macroeconomic uncertainties.
Bitcoin Price Falls Under $80K
According to CoinMarketCap data, Bitcoin price has slipped under $80K again after showing glimpses of promise early in the day. BTC currently exchanges hands at $79,511, a steep drop of nearly 4% over the last 24 hours.
Bitcoin price reached a daily high of $83,541 before reversing toward lows of under the $80K mark. Prices traded for as low as $78,456 leaving investors scratching their heads over price performance.
The largest cryptocurrency looked set for a parabolic rally following the release of US CPI data. Per the data, the US CPI inflation rate settled at 0.1%, sparking belief for Bitcoin’s massive breakout ahead of an imminent Fed rate cut. Within hours of the data release, BTC soared by 8% before hitting a glass ceiling and tumbling below $80K.
Why Did Bitcoin Slump?
The BTC price decline is a response to rising global trade tensions stoked by the US and China. The back-and-forth tariffs are forcing the hands of investors to pull funds from risk-on assets to safe-haven alternatives. Investors are funneling funds to gold and US treasuries given Bitcoin’s decoupling from the tech-heavy S&P 500 to earn the tag as an uncorrelated asset.
Bitcoin and other cryptocurrencies are facing dire risk of price slumps as a result of the China-US tariff wars. Despite the positive fundamentals in the space, macroeconomic events are affecting Bitcoin in the short term.
However, cryptocurrency analyst Axel Adler describes the macro-fuelled slump as a healthy consolidation for BTC price. Adler notes that despite the slump Bitcoin price is still demonstrating “resilience to external economic shocks.”
“The current correction looks like a healthy consolidation rather than a sign of deep crisis as holders perceive market and geopolitical risks less critically than direct technological threats,” said Adler.
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