$BTC
After Powell's speech last night, the price of Bitcoin showed a significant downward trend. As of December 19, 2024, the price of Bitcoin has dropped by about 30% from its previous high. This decline has not only affected the Bitcoin market but has also impacted the entire cryptocurrency sector, attracting widespread attention from investors.
Analysis of the reasons for the decline:
1. Macroeconomic factors
• Increased global economic uncertainty: A slowdown in global economic growth and heightened geopolitical tensions have led to a decrease in investors' risk appetite, prompting them to withdraw funds from high-risk assets and move towards safe-haven assets.
• Central bank monetary policy adjustments: Many central banks have adopted tightening monetary policies, raising interest rates to cope with inflationary pressures, resulting in a tightening of liquidity and putting pressure on risk assets.
2. Technical factors
• Market overbought: After a continuous rise in Bitcoin prices, the market has shown signs of being overbought, with technical indicators signaling a top, leading investors to take profits, causing a price correction.
• Network congestion: Recently, the trading volume on the Bitcoin network has surged, leading to network congestion and rising transaction fees, affecting user experience, with some investors choosing to temporarily exit the market.
3. Regulatory policy factors
• Strengthened regulation: Multiple countries and regions have increased their regulatory scrutiny of the cryptocurrency market and implemented a series of restrictive measures, adding uncertainty to the market and suppressing investors' willingness to buy.
• Policy uncertainty: The uncertainty of regulatory policies has intensified market sentiment fluctuations, causing investors to adopt a wait-and-see attitude, further driving down Bitcoin prices.
4. Market sentiment factors
• Impact of negative news: Recently, the Bitcoin market has frequently encountered negative news, such as security incidents at exchanges and project teams absconding, severely undermining market confidence and triggering panic selling.
• Changes in investor psychology: Market sentiment has shifted from previous optimism to pessimism, resulting in changes in investors' expectations for the future, leading to a surge in selling pressure.
