Here's why cryptocurrencies are falling

The wind reversed in cryptocurrencies, which were positive with Bitcoin exceeding the critical level the other day. Bitcoin quickly changed its direction from the 20 thousand dollar level. So what is the reason for the sharp movement in Bitcoin? Here are the details...

While the sharp movements in cryptocurrencies continue to attract the attention of investors, the reason for today's decline is curious. Bitcoin, the highest volume of the market, turned its direction upwards from the levels of 18 thousand dollars the other day and exceeded the critical threshold of 20 thousand dollars.

Bitcoin

Bitcoin rose as high as $ 20,385 the previous day, making a premium of more than 6 percent on a daily basis. However, after the US markets opened, the leading coin, which turned to a sharp decline as of 18:00 in the evening, completed the day at $ 19,79. Bitcoin fell below the $ 19,000 level today and fell as low as $ 18,471.

Ethereum

Ethereum, the highest-volume altcoin, tested an important threshold by rising to the level of one thousand 400 dollars the other day. However, with the effect of intense sales in the evening hours, the Ethereum price completed the day at one thousand 328 dollars. Ethereum continued its decline today, falling to $ 1253. On a daily basis, the loss of value reached 5.6 percent.

What is the reason?

Especially after the US Federal Reserve's (Fed) interest rate hike decision last week, the decline in commodities, cryptocurrencies and stock markets accelerated. While the flight from risky assets accelerated, the orientation towards the fiat dollar increased. While the rise in interest rates in the US accelerates the flow of dollars into the country, this increases the attractiveness of the dollar. Investors are keeping their money in dollars instead of digital assets. The rapid increase in demand for the dollar is pushing the dollar index up globally. The dollar index, which analyzes the movement of 6 developed country currencies against the dollar, exceeded 114.778 today, breaking a 20-year record. The US 10-year bond interest rate rose sharply, rising above the 4 percent level. With the negative economic impact of Covid-19, the war between Russia and Ukraine, the rapid rise in food and energy commodities, and the disruption of supply chains, inflation is increasing worldwide, forcing central banks to implement tight monetary policy. The acceleration of tight monetary policy steps by the Fed and other developed country central banks increases the pressure on digital assets. Follow Global Economic Developments on Social Media! Click here to follow Ieconomy official Facebook account! Click here to follow Ieconomy official Instagram account! Click here to follow Ieconomy official Twitter account!