Bitcoin flash crash warning sounds ever louder last few days

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Last Updated on 22 February 2024 by CryptoTips.eu

For about two weeks now, it seems the world’s stock markets are having doubts about the future development of share prices. Bitcoin did very well in the first two weeks of February but now seems to be hitting a large wall of resistance around the $52,000 and $53,000 levels.

Warnings of an impending Bitcoin flash crash are growing ever louder, as analysts claim that if it can’t go higher, it will only go lower. What is going on?

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Interest rates, inflation and jobs

Now that Bitcoin has mainly been purchased by institutional investors in recent months, the correlation with the American stock markets has of course increased.

Every major movement in the American (and by extension European) stock markets, thus causes a similar movement in the price of the largest cryptocurrencies. Since investment funds and Wall Street companies make their investments dependent on the economic outlook, we need to look there for the answer.

The latest inflation figures and job figures in the United States were recently announced. These both showed that inflation is still higher than desired while the economy continues to run smoothly and therefore many jobs are being created every month.

With that knowledge, it does not look like the Federal Reserve will lower interest rates anytime soon, and that is not good news for the Bitcoin price.

After all, lower interest rates mean that investment funds take more positions in risky investments such as tech and crypto, which automatically pushes the price of Bitcoin upwards. If the interest rates stay high, investment funds are more cautious.

Analysts claim that if Bitcoin were to break the yearly high of $53,000 in the coming days, the All Time High of $69,000 could soon be in sight (in other words before the halving, set for half of April).

If Bitcoin however falls further, support is now to be found in the zone around $42,000 to $45,000.

Jeroen Kok

Jeroen is one of the lead copywriters on Cryptotips.eu and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Find me on LinkedIn / [email protected]
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