Top reasons why the Bitcoin sell-off is deepening

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On April 12th, 2022, Bitcoin prices fell below USD 40,000 for the first time since March 16th, 2022, according to CoinMarketCap data. Experts believe USD 40,000 is a crucial support area for Bitcoin prices as it is the fine line separating bullish and bearish market sentiments.The pullback was triggered when Bitcoin prices slipped below another crucial support level of USD 43,000 on April 11th, 2022.

Surprisingly, this drop was in close correlation with tech stocks. "This roll over in tech is affecting BTC as well," tweeted William Clemente, Lead Insights Analyst at Blockware.According to Bloomberg data, Bitcoin has begun to mimic the Nasdaq 100 index (NDX) ever since the pandemic began.

Currently, the 40-day correlation between Bitcoin and the NDX is at an all-time high of 0.6945, where +1 is very extremely correlated, and -1 is non-correlated.Also Read| Millennials, Gen Z happy to be paid salaries in crypto. But weigh the pros and consThe USA also published its latest Consumer Price Index (CPI), which encompasses the prices of goods and services in the country and measures the variations in purchasing power.

The report revealed that consumer prices in March 2022 were 8.5 percent higher than in March 2021, thus indicating that inflation was growing at record speeds.Prices have been skyrocketing due to increased gas prices stemming from the Russia-Ukraine war. But, even if we strip this CPI of food and gas prices, it still shows a 6.5 percent gain over last year.