Bitcoin Is Down, Here’s Why...

Article source, here.

TL;DR

• April's consumer price index (CPI) report is coming out soon, which is essentially just a list of products we all use in our daily lives.

• If the basket of goods has increased in price, it means inflation is still reeling its ugly head. If not, it indicates inflation is finally coming under control...there's just one problem.

• Even when the CPI numbers have shown inflation to be easing in the past, the Fed has still raised interest rates.

• So the market thinks the Fed will raise rates regardless of which direction we see CPI numbers moving.

• When rates get raised, most investors tend to move their money out of assets that are perceived to be high risk (assets like Bitcoin). And sell pressure = price drops.

Full Story

Alright, time for our bi-weekly(ish) check in with Bitcoin.

It's down over the past month or so, from $30k to around $27.4k at the time of this writing.

Which, if you're a short term trader, ain't great...but if you have a longer time horizon, you're just thankful it's no longer hovering around $16k.

But hold up...

We just had another bank failure, and the last time that happened Bitcoin jumped - because it's seen as a safe haven from the traditional banking system...so why the drop this time around?

Well, April's consumer price index (CPI) report is coming out soon, which is essentially just a list of products we all use in our daily lives.

If the basket of goods has increased in price, it means inflation is still reeling its ugly head. If not, it indicates inflation is finally coming under control.

...there's just one problem.

The Federal Reserve (the folks that are responsible for raising/lowering interest rates) are pretty darn stubborn when it comes to fighting inflation.

Even when the CPI numbers have shown inflation to be easing in the past, they've taken the 'we're on the right track, let's keep raising rates to fight this thing even more!' approach.

So the market thinks the Fed will raise rates regardless of which direction we see CPI numbers moving.

And when rates get raised, most investors tend to move their money out of assets that are perceived to be high risk (assets like Bitcoin).

And sell pressure = price drops.

Alright, now you know!