What is the reason for the decrease in the price of Bitcoin and Ethereum?
The price of Bitcoin and the digital currency market followed the decline in the value of the United States stock market and fell. Bitcoin price fell below $23,000. The reason for the market’s concern was the publication of the unexpected growth of the employment index on Friday, November 14, which may lead to further interest rate increases to control economic growth and inflation. Ethereum and other market giants also faced price reduction. Dogecoin (DOGE) and Polygon (MATIC) experienced the biggest drop. On the opposite side, Binance Coin (BNB) had the lowest decline.
According to Wallex and quoted by Forkast, the price of Bitcoin decreased by 1.6% to $22,948 on the morning of Monday, February 6, Hong Kong time. Thus, the weekly performance of Bitcoin reached minus 3.5%. According to Coin Market Cap, the price of Ether decreased by 2.1% and reached $1,631.
Dogecoin fell 3.8% to $0.09, but its weekly performance is still positive (2.1%). Polygon lost 3.8 percent of its shares to $1.2. In this way, during the last seven days, Matic experienced a growth of 2.2%. The price of Binance Coin only fell 0.8% to $427.85, but still finished the week up 3.3%.
The total value of the digital currency market decreased by 2% to 1.07 trillion dollars and the total volume of transactions increased by 27.4% to 48.9 billion dollars.
The US stock market fell on Friday; The Dow Jones Industrial Average and the S&P 500 Index were down 0.4% and 1%, respectively. The Nasdaq index also fell by 1.6 percent.
Nonfarm payrolls rose by 517,000 in January, far more than expected by 185,000, data from the U.S. Bureau of Labor Statistics showed on Friday. Also, this amount was double the 260,000 recorded in December. The US unemployment rate is currently at 3.4%, the lowest rate since 1969.
The improvement in unemployment along with the strong U.S. services sector data released on Friday are both signs of a strong and buoyant economy, but investors seem to have taken the numbers as a sign of stubborn inflation that could trigger a stronger reaction from the U.S. economy. on the side of the Federal Reserve and increasing interest rates.
It seems that the aggressive policy of raising interest rates by the Federal Reserve last year had a positive effect on inflation. In December, the US consumer price index rose 6.5 percent year-over-year, a significant decrease from the 7.1 percent rate recorded in November. In fact, this is the largest monthly decline in inflation recorded since April 2020.
US interest rates are currently between 4.5% and 4.75%, a 15-year high, and Federal Reserve officials have repeatedly signaled their intention to raise interest rates by up to 5% to bring inflation back to the 2% target. .
What is the reason for the decrease in the price of Bitcoin and Ethereum? The first time in the blog Valx. appeared.