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Continue to decline and enter a bear market, Bitcoin drops again below $19,000

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On Tuesday, Bitcoin momentarily crossed the $20,000 mark, reaching its highest level in more than a week. However, it is still unable to leave its narrow trading range.

Another interest rate announcement from the US Federal Reserve may have traders preparing for a peak in the value of the US dollar, which would be advantageous for bitcoin, according to one analyst.

The S&P 500 made a new intraday low for the year on Tuesday after closing at its lowest point since 2022 on Monday.

On Tuesday, Bitcoin momentarily crossed the $20,000 mark, reaching its highest level in more than a week. However, it is still unable to leave its narrow trading range.

However, as stocks descended further into a bear market, the largest cryptocurrency in the world by market cap began to decline. Data from Coin Metrics show that it last changed hands for $19,078.21, a decrease of less than 1%. Ether's decline was likewise only 1% or such. 

1. Investors are on edge about where the price of bitcoin will go next as it continues to trade in a narrow range between $18,000 and $25,000. The crytpo market has seen a variety of problems, including failed projects and bankruptcy.

Bitcoin is still having trouble finding its course. Since the middle of June, it has been trading between $18,000 and $25,000 after a slump that saw roughly $2 trillion of the market's value evaporate since its peak in November.

The market's drop was caused by central banks raising interest rates in an effort to rein in rogue inflation as well as a wave of insolvencies and bankruptcy cases that spread throughout the cryptocurrency sector.

Cryptocurrency investors have been keeping an eye on monetary policy

Due to the strong correlation between digital currencies and U.S. stock markets this year, cryptocurrency investors have been keeping an eye on monetary policy. The S&P 500 and the tech-heavy Nasdaq have been under pressure from higher interest rates, which has spread to other riskier assets like cryptocurrencies.

According to Vijay Ayyar, vice president of business development and international at cryptocurrency exchange Luno, the U.S. Federal Reserve's 0.75 percentage point rate hike last week was a "big event" for the cryptocurrency markets.

This was much in line with market expectations, so much of that emotion has already been taken into account, according to Ayyar.

It's interesting to note that the Monday-starting bitcoin rise took place despite a decline in American stocks, with the S&P 500 ending at its lowest level since 2022.On Tuesday, stock futures increased. There are indications that the relationship between cryptocurrencies and stocks may be waning.

Investors are actively monitoring the US dollar at the moment. This year, the dollar index, which compares the dollar to a basket of other currencies, has increased by more than 18%. Since bitcoin rotates counter-clockwise to the dollar, a strong dollar is bad for the digital currency. The dollar index, on the other hand, might be approaching its peak, which would indicate a potential bottom for bitcoin, according to Ayyar. That might be the cause of bitcoin's rise.