"Falling up and falling up, the investor must be giddy to think about it."
Shortly after rallying up to $72,000, the price of cryptocurrency king Bitcoin (BTC) which is currently trading above $64,000 seems to have collapsed to $59,605 early this morning. Here are three reasons why BTC is falling.
Geopolitical Tensions
Although many investors are interested in receiving BTC through ETFs and active trading, the escalating geopolitical tensions between Israel and Iran have largely contributed to the price drop.
Following the latest update showing that the war situation is worsening in the region, BTC is being sold off by investors to protect their interests and profits due to the heightened war tensions.
The Federal Reserve's Stance Against Inflation
Investors are becoming more cautious after the United States (US) economy is now shrouded in inflation concerns after Federal Reserve (Fed) Chairman Jerome Powell revealed that the Fed will not cut interest rates for the time being.
The development prompted speculation about the crypto market's momentum which had already turned weak and then forced investors to adopt a panic attitude which pushed the price of BTC to experience selling pressure.
FOMO And Volatile Investor Behavior
Investor sentiment towards BTC has turned greedy when the spot BTC ETF is approved, where greed refers to the purchase of digital assets in the hope of making a profit in the long term.
But in the middle of the increasing tension of the war plus there is FOMO, investors who act to sell their digital assets quickly may contribute to the price fluctuations that BTC often experiences at the moment.
Retail greed can also lead to over-trading, sentimental trading and panic selling which can indirectly encourage BTC price declines.
