The Ukraine conflict and the threat of the American central bank raising interest rates are unsettling the crypto market.
Bitcoin ( BTC ) continued to fall this Thursday after trading on Wall Street opened, which is largely due to the ongoing uncertain situation in global politics.
The markets are unsettled
Above all, the tensions between Russia and Ukraine are currently causing great uncertainty on the financial markets, which is now also affecting the crypto market.
In addition, the American Federal Reserve could soon raise the key interest rate again. All eyes are therefore on James Bullard, Governor of the Federal Reserve of St. Louis, who will probably comment on the subject in the next few hours.
In an interview on Wednesday, Bullard promised that he would support a drastic interest rate hike to combat rising inflation.
“Otherwise we will miss our inflation target without having used our most important lever. The policy rate is still very low and at the same time we are buying bonds,” the central bank governor told CNN . To which he added:
"In the current situation we have to tighten the reins again."
However, an increase in the key interest rate would put pressure on risky financial products such as shares. Since Bitcoin has had a high correlation to the stock market for a long time, the market-leading cryptocurrency would probably also be negatively affected by this measure.
The Ukraine conflict only increases the uncertainty, because even if a Russian troop withdrawal is slowly in sight, the financial markets remain cautious for the time being.
The important stock index S&P 500 responded to this sentiment with a loss of 1.2% after Wall Street opened.
Is the downturn imminent?
This nervousness is also noticeable for Bitcoin, because trades are currently easing noticeably in the range up to 40,000 US dollars.
As the data from Material Indicators shows, the demand on the market-leading crypto exchange Binance in this area is correspondingly thin, even below the US$ 40,000 mark it now looks similar, which is why a crash down to US$ 35,000 is definitely within the scope of the is possible.
"This does not mean that the next support will collapse immediately, but the risk of a downturn is definitely increased," commented Material Indicators on the relevant price chart.
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