Why Can’t Bitcoin Keep Its Momentum Up?

Bitcoin has dropped again as it comes up against the same obstacle that has held it down for the past two months.

Written by: Timothy St. John • Thursday, May 9, 2024 • 2 min read

• Last updated: Thursday, May 9, 2024

After an upswing on Wednesday, Bitcoin (BTC) has fallen again, down 1.45% for Thursday morning to a rate of $61,362 (BTC/USD).

Bitcoin suffering from powerful resistance.

The coin simply cannot catch a break, with one hurdle after another. As soon as Bitcoin looks to be building up some momentum, it takes a hit and falls back down.

This is the same crypto token that did so well at the beginning of the year, just about doubling its value since January. Over the last two months, though, Bitcoin has suffered from an inability to break back through the high levels it had achieved already this year, kept down by lower and lower resistance levels.

It was not long ago that $80,000 seemed an impossible level for Bitcoin to achieve, and then $70,000 became the new resistance level, and now the coin can barely get above $65,000 for any length of time.

That puts those wild predictions about Bitcoin at $100,000 in 2024 in a new light, making them seem more farfetched than ever before. But what is it that is keeping Bitcoin from performing like it did earlier in the year?

Obstacles to Bitcoin’s Rally

Much of the blame can be put square on the lap of US inflation. Yes, inflation was high at the beginning of the year, but economists were hopeful that things would turn around and that inflation would diminish after a few months. They saw the crypto industry booming and expected that this boom was pointing to an improving economy.

That was not the case, though, and as the year drags on, it has become increasingly clear that inflation is only getting worse. The Federal Reserve has to keep pushing back interest rate cuts to where many economists are not even sure that we will see those cuts this year. They were supposed to have taken place months ago, but inflation was too high for the Fed to risk it.

As long as inflation remains high, Bitcoin is going to struggle to break through to new levels and grow substantially. Even the halving did not do much for the coin, against all industry expectations. It is likely that until inflation improves, Bitcoin will continue to stay close to its current level.

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ABOUT THE AUTHOR See More

Timothy St. John

Financial Writer - European & US Desks

Timothy St John is a seasoned financial analyst and writer, catering to the dynamic landscapes of the US and European markets. Boasting over a decade of extensive freelance writing experience, he has made significant contributions to reputable platforms such as Yahoo!Finance, business.com: Expert Business Advice, Tips, and Resources - Business.com, and numerous others. Timothy's expertise lies in in-depth research and comprehensive coverage of stock and cryptocurrency movements, coupled with a keen understanding of the economic factors influencing currency dynamics. Timothy majored in English at East Tennessee State University, and you can find him on LinkedIn.