Bitcoin price drops sharply after uncertain economic news

The bitcoin price dipped below $26,000 last night. The drop comes after sentiment turned more negative yesterday following, among other things, the Federal Open Market Committee (FOMC) publication minutes. At the time of writing, bitcoin is trading at a price of $26,208 on crypto exchange Coinbase. On the Dutch crypto exchange Bitvavo, BTC is worth 24,473 euros.

Inflation uncertainty pushes bitcoin down

The BTC price has been falling gradually since Tuesday. Yesterday, however, there was an acceleration downwards after the price initially managed to make a small jump. Last night, after hitting a local high of $26,489, bitcoin finally fell 2.3%.

Bitcoin price chart
Bitcoin Price on Coinbase – Hourly Chart as of 7:00 AM, May 25.

One of the reasons for the negative sentiment may be in the United Kingdom. The tone was already set there yesterday morning with disappointing inflation figures. For example, an annual core inflation of 6.2% was expected. That figure ended up being higher with an inflation rate of 6.8%. Month-on-month inflation was also higher than expected.

FOMC shows mixed picture

Furthermore, later in the evening the FOMC meeting minutes published. Although there is hope here and there that the US central bank will not raise interest rates further, the meeting minutes show that opinions are still divided. For example, the path back to an inflation rate of 2% could continue to be unacceptably slow and further increases may be necessary.

All in all, bitcoin dipped to a price of $25,864 overnight. A big bounce then brought BTC in a swift move to its current level of around $26,200. With this, the price is still trading close to 200 weeks moving average (MA), an important level of support.

Read Also:  Ethereum Leads Altcoins with Bullish Outlook: Crypto Analysts

Yesterday’s bitcoin news reported that long-term holding of BTC has never been more popular than it is now. This despite the boring share price developments of the past few weeks. Research shows that 68% of all bitcoins have been held for at least a year. Read more about this news here.

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