Bitcoin fails to get past $44K and loses 4% due to accelerating inflation rate

This year started with a market plunge that saw the majority of cryptocurrencies like Bitcoin and Ethereum nosedive.

Bitcoin has, however, been trying to correct the downtrend only for the bull correction to be cut short below $45K. Today, BTC dropped by more than 4% sending Bitcoin below $44K.

At the time of writing Bitcoin was trading at $43,609.63.

Why Bitcoin price is lagging

Bitcoin price has been up and down after it dropped below $40k in January following the announcement by the FED that it was going to increase the interest rates gradually in the coming months. This followed reports that the U.S annual inflation rate has hit a 40 year high of 7% and that the interest rate will be increased for the first time in more than three years.

Currently, Bitcoin’s support level is at $42,578 and will have to reclaim $44,208 before retesting the resistance level at $45,161. If it happens to go below the support level, then it can drop to as low as $41,625, which will be a big blow to the world’s leading digital asset.

Crypto Market currently on the decline

While Bitcoin registered a drop today, other cryptocurrencies have followed suit today. Ethereum, for example, has dropped by 5% to $3,097.4.

Other Altcoins have recorded even bigger losses. Both XRP and Polkadot (DOT) have dropped by over 9% in the last 24 hours. Respectively, Solana (SOL) also dropped by 8% to trade at $106.15.

Due to the sudden downtrend, the entire market cap valuation has dropped by approximately 3% from above $2 trillion to $1.943 trillion.

Bitcoin investors are however optimistic that the coin will resume the bullish trend soon.