Bitcoin Plummets as Macro-Economic Conditions Take a Sudden Turn

Bitcoin has plummeted to $90,000 in the past 24 hours, after investors sold off due to unfavorable macroeconomic conditions.

Bitcoin Plummets As Macro Economic Conditions Take A Sudden Turn

Bitcoin suddenly plunged to $94,200, before recovering to its current price.

The drop appears to have been driven more by macroeconomic concerns than by fundamentals in the cryptocurrency market. The shake-up in investor sentiment may have been due to a sharp drop in Nvidia (NVDA) shares following the announcement of a monopoly investigation, along with Chinese inflation data showing a 0.6% decline in November compared to the previous month.

Concerns about a weakening global economy likely weighed on the cryptocurrency market, contributing to the recent correction.

Bitcoin has seen a significant decline in buying pressure over the past few days. One indicator of weakening buying pressure is the Stablecoin Supply Ratio (SSR). SSR measures the ratio of Bitcoin’s market capitalization to the total capitalization of all stablecoins in circulation, reflecting the willingness of investors to switch from stablecoins to Bitcoin.

Low SSR reflects high buying power from stablecoins, indicating that abundant liquidity from stablecoins is ready to be converted into cryptocurrency, thereby driving price momentum. Conversely, high SSR shows that stablecoin liquidity is lower than the cryptocurrency market capitalization, signaling that Bitcoin buying power is weakening or demand is decreasing.

Bitcoin Ssr
Bitcoin Ssr

According to CryptoQuant, Bitcoin’s SSR has spiked to 18.29, indicating that buying power is not as strong as before. Therefore, a correction in Bitcoin’s price is inevitable.

Another indicator that confirms this trend is Bulls and Bears. To understand better, “bulls” are addresses that have bought at least 1% of the total trading volume over a certain period of time, while “bears” are addresses that have sold the same proportion.

Read more: Michael Saylor Predicts Bitcoin Will Surge to $13 Million

When the Bulls outnumber the Bears, Bitcoin prices tend to rise. However, if the bears are in control, the opposite happens. According to data from IntoTheBlock, the Bulls and Bears indicator has remained unchanged over the past seven days, indicating that Bitcoin investors are hesitant and refraining from increasing their buying volume. If this trend continues, Bitcoin prices will continue to face pressure and find it difficult to break above current levels.

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