Bitcoin price traded below $19,000 on Wednesday morning as the major cryptocurrency plunged to its lowest level since July, driven by a fall in global stock markets and the continued strengthening of the US dollar.
At the time of this writing, bitcoin (BTC) is trading at $18,741, down 5.5% over the past seven days, data from Coingecko shows, Wednesday.
The last time bitcoin fell below $19,000 was on July 4, when its price reached $18,600. The current level is a 25% correction from the August 15 rally to $25,000.
Before reaching $18,600, BTC touched $18,900 in November 2020 and reached its all-time high of around $60,000 a year later.
The price of bitcoin is feeling the pressure of the US market
According to data from CoinDesk, at 7:46 am Eastern Time, BTC was trading at around $18,745, a drop of over 5%. Ether, which has significantly outperformed bitcoin in recent weeks, fell nearly 10% to $1,514.
It appears that several factors are driving investors to distance themselves from bitcoin. As always, the asset’s recent heavy volatility is highly tied to the US stock market.
After a turbulent trading session on Wednesday, shares fell on concerns that the Federal Reserve would continue to raise interest rates.
As US stocks lost $1.25 trillion in a single day following US Federal Reserve Chairman Jerome Powell’s August 27 remarks, the market has been somewhat volatile.
Powell said at the annual Jackson Hole Economic Conference that the potential for big interest rate hikes remained, forcing the S&P 500 to lose 3.5% that day.
Russia’s oil shutdown takes toll on bitcoin’s price
Meanwhile, the number of bitcoin wallets has hit an all-time high of between one and 10 BTC, despite the world’s most valuable cryptocurrency having a market cap of less than $19,000.
According to the latest data, there has been a steady increase in the number of addresses between one and 10 bitcoins since the price of BTC fell below $50,000 in late December 2021 and early January 2022.
As it developed, the US greenback has been bolstered by the tightening of central bank policy, which weighs riskier assets. The yield on the 10-year US Treasury note has also increased.
According to analysts, bitcoin’s decline increased after last week’s announcement that Russia closed the Nord Stream 1 pipeline, blocked gas in Europe and destabilized markets. Despite this, bitcoin fans are still perplexed.
The current price drop resulted in the liquidation of $77 million in bitcoin positions, with over $40 million being liquidated in the past hours alone. A large chunk of BTC was sold after its price dropped to around $18,963.
BTC total market cap at $357 billion on the daily chart | Source: TradingView.com
Featured image from Open Access Government, chart from TradingView.com