Why Is Bitcoin (BTC) Falling? What Will Happen to Bitcoin?

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The biggest cryptocurrency turned its direction down with the news of inflation yesterday, the latest recovery was short-lived. The price has fallen again and continues to find Bitcoin at $42,300 at the time of writing.

Why Did Bitcoin Drop?

Inflation that came in yesterday was above expectations and the USA continues to announce record inflation figures in a row. Inflation, which has reached the peak of the last 40 years, makes people nervous about the position the FED will take. If we add the news that the FED is planning an extraordinary meeting to all this, we can see that the decline is not surprising.

First of all, the $39,800 levels need to be followed closely in this decline. If this region is broken, a journey towards the $30,000 levels can begin again and we can say that we have re-entered the falling trend that was broken recently. The price seems willing to make its daily close in the red, it is useful for investors to check the current stop zones, especially for their short-term portfolios. Investors have suffered serious losses in margin trading and a significant portion of short positions have been cleared, so a radical pullback would not be surprising.

Ukraine and FED, What Will Happen to Bitcoin?

The main reason for the decline at the time of writing is based on the Russia-Ukraine tension. The news of PBS NewHouse had a cold shower effect on investors. According to the report, the United States predicts that Putin will take action to invade Ukraine next week. This development will negatively affect the entire risk market, especially the stock markets. Big surprises await the newly recovered US indices.

Cryptocurrency is one of the risk markets. In addition to all these developments, we need to see the potential extraordinary meeting of the FED and the interest rate hikes in March, which are considered to be certain. Inflation is still high, unemployment data is better than expected, so there is no reason why the FED should not increase by at least 50 points. Bitcoin may react seriously to this situation, at least in the short term.