Why is Bitcoin falling so strongly back below $ 40,000?

Unfortunately for most investors, the correction on the cryptocurrency has worsened further, with bitcoin falling below the $ 40,000 threshold.

Nutrition fights inflation

While dollar inflation could act as ” promoter bitcoin, often referred to as inflation hedging, does not make US government actions against inflation in favor of the first cryptocurrency.

In order to control inflation in the country, the US government aims to raise the policy rate and change the monetary policy that will affect dangerous assets such as cryptocurrencies and some stocks.

Market uncertainty

As market data – including financing rates – suggests, traders are currently following the general trend and investing more in short orders rather than betting on the recession. This sentiment is most likely related to the rapidly rising hashrate and potential selling pressure from the growing number of bitcoin miners.

The above-mentioned tightening of monetary policy could act as a fuel bearish sentiment in the market.

Additional regulations

While the capitalization of the Russian cryptocurrency market is still far from its closest competitors, such as the United States or Europe, a total ban on the use and mining of cryptocurrencies would still be a blow to the market.

Bitcoin is trading at $ 38,789 as the latest selling wave of steam hit and launched the cryptocurrency down another $ 560 in the last four hours.