It’s been a week since Bitcoin is back in its $19,000 price range, as the currency could not hold on to the $20,000 price range for long. Now, It’s the fifth time that the flagship currency has dropped this low, yet there is no sign of recovery.
The global scenario for crypto does not look promising either, and it looks like these hostile conditions could continue for the rest of the year.
However, people are perplexed- What has caused the thriving crypto sector to fall so badly? Read on.
Economic crisis
Although the economic crisis is now a global problem, the situation in Sri Lanka has spiraled out of control.
Sri Lanka’s President, Gotabaya Rajapaksha, has run away from the country with his family to the Maldives. Residents have now marched into the presidential residence. At the moment, Sri Lanka is in a state of emergency.
Even Pakistan is about to enter a state of emergency. China is hit by a liquidity cut and the world’s overall economic development has been hampered.
This is expected to have a similar impact on other developing countries, pulling down the market further.
2. The euro loses value against the dollar
No matter how strong the dollar, it was not equivalent to the euro. However, this is no longer the case as the US dollar is now equivalent to the euro, a scenario that has not been seen for 20 years.
This is because US inflation has risen to 9.1%, whereas European inflation is positioned at 6.1%
3. Rising inflation rate
Inflation figures in developed countries like the United States, Canada, European countries and Australia are on the rise. Developing countries like India, China and Pakistan, among others, are also seeing a head start.
Along with these, the purchasing power is indicating a negative trend. All these factors are pointing towards a bear market sentiment.
