Bitcoin prices fall below $20,000 for the first time since the start of July. It has continued to slip, with prices falling by another 1% in the last 24 hours. It s currently trading at $19.8K.
Ethereum has shown an even stronger decline, falling by over 3% in the last 24 hours and close to 6% in the last 7 days. It is currently trading at $1,447.
The decline of crypto prices can be attributed to the dollar’s continued show of strength in the market. Bloomberg’s Dollar spot index is up by close to 7 points, as people stack dollars to protect themselves from volatility. The U.S. Dollar Index has hit a 20 year high of 109.45.
How Bitcoin Lost All Its Strength
The crypto market is currently under two opposite macroeconomic forces. Since the start of 2020, the crypto market has been strongly correlated to the traditional market, especially to tech stocks and NASDAQ. Therefore, it has been increasingly affected by macroeconomic factors.
On the one hand, Bitcoin showed strength based on favorable inflation data. BTC prices crossed $24K after the CPI for August showed cooling inflation. The recently released Personal Consumption Expenditure Index also reinforced BTC’s position.
