The cryptocurrency market is treading on thin ice as Bitcoin slides into another period of correction. BTC plunged below $20,000 again today for the fifth time this month, showing no signs of growth. General sentiment in the market is bleak and could last all year and into 2023. Both the stock and crypto markets could decline more as these three events around the world point to their deterioration.
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Here Are 3 Events That Point to a Fall in Cryptocurrency Price
- Uncontrollable economic problems in other countries
Sri Lanka’s economic crisis has worsened and the country is on the brink of financial collapse. The country’s president, Gotabaya Rajapaksa, has fled the country and moved to the Maldives. Sri Lankans recently stormed the presidential palace and the images made headlines. The situation in the country has spiraled out of control and can only get worse as the months go by.
Reports state that even Pakistan is about to face a similar financial situation if not checked. In addition, mass protests have erupted in China when the central banks seized a large number of accounts. China is facing a liquidity crisis and development has been going on for more than two months.
The domino effect could soon hit other developing countries, creating instability in the region. Instability in regions leads to more corrections in the market as the global economy is under pressure.
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2. Euro falls sharply against the dollar
For the first time in 20 years, the U.S. dollar is equal to the euro as the currency plunged to new lows. The stock market in European countries is falling sharply and fears of a dramatic crash are looming. Inflation in the UK hit a new high in 40 years of 9.1% and inflation in the Eurozone is at 6.1%. The numbers are forecast to peak in the coming month.
In addition, several other global currencies are now undervalued against the US dollar. The development will lead to an imbalance in the import and export sector as companies will be forced to raise their prices to cover their losses.
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3. Rising inflation
Inflation rates in all developed countries are skyrocketing, hitting new numbers every month. The United States, Canada, European countries and Australia had unprecedented inflation rates. Inflation in developing countries such as India, China, Pakistan and other Asian countries is rising sharply.
Purchasing power is declining and all this points to ‘bad days’ ahead. Therefore, the stock market and the cryptocurrency market may fall further in the coming months.