Experts in the cryptocurrency market attribute the recent three-day decline in the price of Bitcoin to excessively positive market sentiment and the announcement of a potential interest rate hike by the US Federal Reserve.
According to CoinGecko, Bitcoin’s market price has continued to drop for three consecutive days, reaching $27,980 by mid-Friday on April 21.
In the last 24 hours, the cost of Bitcoin has dropped by 2.4%, while its weekly trend has decreased by approximately 9%.
This decline in the value of the top cryptocurrency by market capitalization has sent the entire cryptocurrency market into a downtrend.
Currently, the total market capitalization of the crypto market has decreased by over 2%, to $1.18 trillion.
Ethereum has also suffered a loss of 1.7% overnight and is now trading at around $1914, which is 9.5% lower than its initial value on the weekly chart.
Cryptocurrency analysts suggest that the primary reason for the market downturn could be the increase in the yield of the US dollar, resulting from falling gold prices caused by the US Federal Reserve’s actions.
Additionally, experts from the cryptanalytic firm Sanitment believe that the decline in the cost of Bitcoin could be due to overheating of the Bitcoin derivatives market, caused by overly positive investor sentiment.
This theory is supported by analysts from the Korean firm CryptoQuant, who conducted their study on the possible reasons for Bitcoin’s market price fall below $30,000, based on the ratio of two futures market indicators: open interest rates and funding rates.