[Bitcoin Now] US Stock Market Rose... Bitcoin Falls Below $21,000 Ahead of Midterm Elections and CPI Announcement

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Myung-hwan Lee] The price of Bitcoin, the leading cryptocurrency, fell below the $21,000 mark as caution grew ahead of the US midterm elections and the Consumer Price Index (CPI) announcement.

According to the global cryptocurrency market tracking site CoinMarketCap, as of 10:50 AM on the 8th, Bitcoin was priced at $20,622 (approximately 28.63 million KRW), down 1.61% from the previous day.

Bitcoin prices are declining despite the US stock market closing higher, showing a synchronized trend. On the 7th (local time), the Nasdaq index closed at 15,64.52, up 0.85% (89.27 points). The Dow Jones Industrial Average rose 1.31% (423.78 points) to 32,827.00, and the S&P 500 index closed at 3,806.80, up 0.96% (36.25 points).

This appears to be influenced by increased political uncertainty ahead of the US midterm elections. In this election, which is being held nationwide starting today, all 435 members of the House of Representatives and 35 of the 100 Senate seats will be elected.

There is analysis that if the opposition Republican Party wins this election, the cryptocurrency market could be positively affected. Lee Sun, Research Center Director at Bithumb Economic Research Institute, said, "If the Republican Party secures a majority in both the House and Senate in this election, there is a possibility that the US Congress's stance on cryptocurrency regulation will shift to be more market-friendly," adding, "If candidates supported by the pro-crypto camp win, their legislative activities will gain momentum, providing an opportunity for the cryptocurrency market to advance to the next level."

The US October CPI, scheduled to be announced on the 10th, is also increasing investors' cautious stance. Investors are focusing on whether inflationary pressures will ease through this CPI announcement, potentially leading the Federal Reserve (Fed) to reduce the scale of its rate hike in December.

Investor sentiment has also cooled slightly. According to cryptocurrency data provider Alternative, the Fear & Greed Index, which measures investor sentiment, dropped 2 points from the previous day to 31 points (fear). This is similar to the 30 points (fear) recorded a week ago on the 1st. Alternative's Fear & Greed Index ranges from 0, indicating extreme fear and pessimism about investment, to 100, indicating optimism.