LENSANUSANTARA.CO.ID – Cryptocurrency tops such as Bitcoin, Ethereum, and BNB may be more vulnerable to external market factors than some crypto fans want to believe.
These big tokens and others fell sharply in the first two weeks of April 2022, with a broader Crypto market lost almost $ 400 billion during that time. What’s worse, analysts say that “disasters” in the financial market can send the price of crypto that jumped further.
While Bitcoin has moved above and below the threshold of $ 40,000 as long as most 2022, the latest price decline is a reminder for investors who decentralize digital tokens may still react strongly to factors such as inflation, taxes, and overall market performance.
External factors indicate an effect on crypto prices
The latest Cryptocurrency sales coincided with the decline in the Futures of the U.S. Stock Market Futures. This decline may be caused by the news that March marks an increase of 8.5% year-to-year (yoy) in the Consumer Price Index (CPI).
Inflation remains a significant concern, and with that the possibility of recession in the near future. Investors who view cryptocurrency as a strong alternative investment during the market turbulence must be careful to see how the price of cryptocurrency moves when the federal reserve works to curb inflation.
The impact of the tax season?
The price level of the new cryptocurrency is also possible partly caused by the tax season. In the majority of the new tax season, from January to March, Bitcoin has fallen.
Although this could be a coincidence, some analysts suspect that bitcoin tends to perform badly in the first months of this year relative to other months because investors who are aware of the big profits in crypto assets during the previous year tend to sell some of their ownership to include anticipated taxes anticipated obligations. This is complicated by different ways so that jurisdiction treats capital gains.
Federal reserve policy
Because analysts hope that Federal Reserve increases interest rates and loan costs, investors in the Crypto room might want to oversee the signs that economic demand suffers. This may feel the most prominent in traditional areas that are more risky like cryptocurrency.
Increased bond yields can also minimize excessive returns that investors can achieve from cryptocurrency relative to safer bets such as bonds. Combined with persistent inflation and other large -scale economic problems, this shift can cause investors to turn away from cryptocurrency to safer alternatives. This can be reflected in the price level of digital tokens for those who continue to trade in this room. (Adam)
