The Crypto Market Is Down, Here’s Why

• • Crypto prices keep falling since this year.
  • Investor confidence is being blown away by the bear market.

On October 20th Bitcoin’s (BTC) price has been having a had time staying at a marginal 0.23% gain . Overall, in the crypto market, the prices have been falling largely and the bigger market remains in a sharp deceleration. Bitcoin’s price is currently trading under $20,000 and this makes investors and traders believe the level is psychologically significant support and resistance level.

There is concern over the United States Federal Reserve’s lack of progress, on compressing and putting down high inflation, and this is likely the reason for the lengthy anxiety and prices seen in the crypto market. According to Patrick Harker, Philadelphia Federal Reserve President, the high-interest rates have not been helping when it comes to suppressing inflation, stating that “we are going to keep raising rates for a while.”

Analysts believe that Federal Reserve’s high rates represent another policy error that is, delaying to address rising inflation and that next year will face a deep recession. September’s consumer price index (CPI) showed consumer prices rising by 0.04%. As compared to a year ago consumer prices are now higher. Additionally, there is a 0.4% increase in consumer prices, the core CPI rose by 0.6% month-to-month since September and by 6.6% over the past 12 months, when food and energy prices are removed.

By hiking the rates, the Federal Reserve wants to cool off the economy and put a limit on high inflation. The October 13th higher-than-expected report is likely to translate into another round of 0.75 basis point hikes in the upcoming months.

The following dates show the importance of economic events that have a history of impacting investor sentiment in the crypto market:

• Oct. 17 – end of the month: Q3 earnings
• Oct. 28: Personal Consumption Expenditures (PCE) price index

Recently several major US companies are reporting quarterly earnings and the mixed results are causing volatility in equities markets. An example is Tesla (TSLA) stock, which dropped by 6.2% after its Q3 earnings target was missed. The electric vehicle manufacturer points to production and delivery challenges. In addition to all these events, the strength of the United States dollar and what appears to be a serious upsurge in the conflict between Ukraine and Russia are taking a toll on all markets.

Lastly, we should note that the main reasons why crypto prices keep falling are the Federal Reserve Interest rate hikes, the persistent threat of regulation and scams, and Ponzis which have triggered liquidations.