$100 Billion Cleared in Just Minutes
Today, the cryptocurrency market experienced a sudden crash, with the prices of Bitcoin and Ethereum falling. Other major currencies also saw significant declines. In just minutes, about $100 billion was wiped out of the combined value of all cryptocurrencies.
Bitcoin is down 5% in the last 24 hours. At the same time, the price of the second largest cryptocurrency, Ethereum, has fallen by a similar amount. Additionally, Ethereum’s rivals Solana, Cardano and Avalanche are down about 3%, while Ripple’s XRP and Terra’s luna are leading the significant crypto markets down.
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Markets were plunged into chaos on Wednesday after the Federal Reserve announced it would raise interest rates. The sudden crash took place amid a tech company led stock sale in response to this news, which has since spilled over into other sectors as investors flee to safer assets.
The US economy could collapse recession because of the interest rate hikes and the tightening of monetary policy. Wall Street had a bad day yesterday. The Dow Jones Industrial Average lost more than 1,000 points and the tech-heavy Nasdaq fell 5%. Yesterday’s losses preceded major rallies in the previous session.
Bitcoin, which usually moves with the stock market, is stuck in a narrow range throughout the year. It has struggled to return to its high prices from late 2021 amid wider market sell-off.
Bitcoin follows US stocks
Bitcoin isn’t the only thing struggling — the S&P 500 has also fallen to a new all-time high for this year. Sam Kopelman, the UK manager for bitcoin and crypto exchange Luno, warned that bitcoin “could slip back into the previously found support range of $36,000-$37,000.”
Bitcoin is trading below the $36,000 level with a 5% drop | Source: BTC/USD chart of Tradingview.com
Kopelman’s take on the major coins such as Ethereum, Solana, Cardano, XRP, Avalanche and Luna is less than optimistic, but he does have some hopes for bitcoin.
Overall, by 2022 crypto market participants have generally moved down the risk ladder. They sell their smaller coins for blue chip coins like bitcoin.
The market has had a delayed reaction to the Federal Reserve’s biggest rate hike since 2000, with the first spike in Wednesday’s news and leading market viewers to believe the potentially “bearish event” has been “priced in”.
Related literature | Over 110,000 Traders Say The Crypto Market Is Shaved Off $120 Billion
On May 3, veteran trader Peter Brandt warned the bitcoin price could drop to $28,000.
The completion of a bear channel usually results in a drop equal to the width of the channel, or in this case a hard test of 32,000 or so – my guess is 28,000
This does NOT make me a hater $BTC.
Featured image from Pixabay and the chart from Tradingview.com