Bitcoin, Ethereum and altcoins nosedive on rampant inflation fears

Bitcoin price has dropped and this has triggered $191 million in futures losses across exchanges. Rampant fear of inflation has pushed Bitcoin and altcoin prices down, hinting at a continuation of the bear market. 

Bitcoin, Ethereum and altcoins continue bleeding with mass liquidation

Crypto-tracked futures were hit by mass liquidation, wiping out $400 million in long positions. The massive losses were incurred as BTC hit a low of $35,700, and Ethereum as well as other altcoins took a steep nosedive. Based on data from Coinglass, BTC futures alone were responsible for $191 million in liquidations. 

The Bank of England increased the base rate from 0.75% to 1% at its meeting on Thursday. Proponents believe the BoE’s warning of 10% inflation and recession, alongside the US Federal Reserve’s increased benchmark interest rate, are the key drivers of the bloodbath. 

In response to the tightening monetary policy of the Federal Reserve and the double-whammy of recession and inflation by the BoE, stock market indices have tumbled. The S&P 500 lost 3.4% as 95% of the companies in the benchmark were in the red. Investors have started pulling capital out of Bitcoin and other risky-based asset classes. 

Vijay Ayyar, Vice President of corporate development at Luno, said:

Overall, global markets have been spooked by growth fears as we can see. The Dow had its worst drop since 2020, and all related risky-based assets followed suit including crypto.

Proponents believe Bitcoin has lost “a key level” when it dropped below $37,500, and it is expected to continue its downward spiral over the next few days. Ayyar believes Bitcoin could test a low of $30,000 soon, and if the price continues to plummet, the asset could hit $25,000. 

@Phoenix_Ash3es, leading on-chain analyst and trader, is bearish on Bitcoin. The analyst argues if Bitcoin fails to close the week above $38,472, there are six consecutive negative weekly candles in a row. A downward spiral like that would be a first in Bitcoin price history.