Bitcoin price dropped below $20,000 Thursday shortly after the completion of the long-awaited Ethereum merge. Ethereum saw a similar drop in price, falling below $1,500 for a time.
Thursday’s drop in the price of bitcoin extends a slide that began when bitcoin fell below $21,000 following the release of August inflation data on Tuesday. The August data showed prices continue to climb despite the Fed’s ongoing efforts to bring them down.
Bitcoin had been on a steady rise since late last week after it dropped below $19,000 — the lowest it had been since June. Bitcoin continues to see the impacts of a challenging economic outlook, with a drop earlier this month following comments by Federal Reserve Chairman Jerome Powell that signaled more interest rate hikes are likely. With another Fed rate increase expected next week, bitcoin will likely see plenty more volatility in the coming days.
“Risky assets are struggling as Powell’s fight against inflation will remain aggressive even as it will trigger an economic slowdown,” says Edward Moya, a senior market analyst at brokerage firm Oanda. The largest crypto is down nearly 8% over the last week.
The leading crypto has been trading in a relatively tight range between $19,000 and $23,000 over the last few weeks. Experts also point to a potential recession, rising interest rates, the continuous war in Ukraine, and inflation hitting a fresh 40-year high as why we’re seeing slumping prices in the stock and crypto markets. The crypto market has been increasingly tracking the stock market lately, which makes it even more intertwined with macroeconomic factors, experts say. Ethereum has followed a similar pattern.
Bitcoin hasn’t been above $50,000 since Dec. 25, 2021. Despite the ups and downs, Bitcoins’price has seen a nearly 70% drop in value since its all-time high above $68,000 on Nov. 10, set back by surging inflation, lagging recovery in the job market, and the Fed’s ongoing signals that it would begin winding down pandemic measures to support the economy.
Bitcoin’s price has been between $21,000 and $23,000 so far this week. Here’s how Bitcoins’ current price compares to its daily high point over the past few months:
