Today, the cryptocurrency market experienced a sudden crash, with both Bitcoin and Ethereum prices plummeting. Other major coins also saw a significant decline. Around $100 billion was wiped out of the combined value of all cryptocurrencies in just a few minutes.
In the past 24 hours, Bitcoin has seen a decline of 5%. At the same time, the price of the second largest cryptocurrency Ethereum fell by a similar amount. Additionally, Ethereum’s rivals Solana, Cardano, and Avalanche are down around 3%, while Ripple’s XRP and Terra’s luna lead major crypto markets lower.
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Markets were thrown into chaos on Wednesday after the Federal Reserve announced it would raise interest rates. The sudden crash came amid a tech company run sale of shares in response to this news, which has since spread to other sectors, with investors fleeing to safer assets.
The US economy could slide into recession due to interest rate hikes and monetary policy tightening. Yesterday Wall Street had a bad day. The Dow Jones Industrial Average lost more than 1,000 points and the tech-heavy Nasdaq fell 5%. Yesterday’s losses preceded the big rallies of the previous session.
Bitcoin, which typically moves with the stock market, has been stuck in a tight range all year. It has struggled to return to its high prices of late 2021 amid a broader market sell-off.
Bitcoin Following US Stocks
Bitcoin isn’t the only thing in trouble – the S&P 500 also fell to a new high for the year. Sam Kopelman, the UK head of bitcoin and crypto exchange Luno, warned that bitcoin could “fall back into the previously found support range of $36,000-$37,000.”
Kopelman’s outlook on major coins like Ethereum, Solana, Cardano, XRP, Avalanche, and Luna is far from optimistic, but he has some hope for bitcoin.
Kopelman said;
Overall, 2022 has generally seen crypto market participants move down the risk ladder. Sell their small coins for blue chip coins like bitcoin.
The market had a delayed response to the Federal Reserve’s biggest rate hike since 2000, initially soaring on Wednesday’s news and leading market watchers to believe the “potentially bearish event” was “priced in “.
Related Reading | Over 110,000 Traders Rekt As Crypto Market Sees $120 Billion Shaved
On May 3, veteran trader Peter Brandt warned bitcoin price could drop to $28,000.
Completion of a bearish channel usually results in a decline equal to the width of the channel, or in this case a hard test of around 32,000 – I guess 28,000
That does NOT make me a $BTC hater.
Featured image from Pixabay and the chart from Tradingview.com