Bitcoin (BTC) slips down 8% in recent crypto market bloodbath, altcoins follow

  • Bitcoin has corrected more than 8 percent losing its crucial support at $37,500 and hinting at a further downside to $30,000.
  • The broader crypto market tanked 11 percent wiping out more than $150 billion in investors’ wealth.

A day after the Federal Reserve announced hiking the interest rates by 50 basis points, the U.S. equity and global crypto market entered a strong correction. As of press time, the broader crypto market is down by 11.5 percent wiping out $150 billion in investors’ wealth.

Similarly, the world’s largest crypto Bitcoin (BTC) has corrected by more than 8 percent and is currently trading at $36,359 with a market cap of $692 billion. The selling on the crypto street resumed after a major sell-off on Wall Street on Thursday. Yesterday, Down Jones corrected by more than 100 points.

This happened as the Federal Reserve takes a hawkish stand with quantitative tightening to control the soaring inflation. This will surely evaporate excess liquidity available in the market post-pandemic. Thus, investors have been moving their money away from risk ON assets such as equities and crypto.

Bitcoin loses key support, can touch $30,000

With the recent price correction, the world’s largest crypto Bitcoin (BTC) has lost crucial support of $37,500. Besides, it’s also trading way below all of its moving averages like the 50 DMA and the 200 DMA. Furthermore, the MACD indicators are also showing a bearish grip on the crypto market.

Analysts believe that Bitcoin holds every possibility of going to $30,000 now. In fact, there won’t be a surprise if it hits a yearly low of $29,000 or below. But if Bitcoin drops under $30,000, it can further go down to $25,000. Speaking to CNBC, Vijay Ayyar, vice president of corporate development and international at crypto exchange Luno said:

Overall, global markets have been spooked by growth fears as we can see. The Dow had its worst drop since 2020, and all related risky-based assets followed suit including crypto.

However, we could see some relief rallies in the meanwhile, but nothing to indicate a change in sentiment.

A concrete reversal shall happen only after Bitcoin convincingly moves past $42,000 to the north and holds above it. However, the chances of reversal look bleak as of now.

Bitcoin Futures and Global Macro

On-chain data provider Glassnode also reports strong volatility in the Bitcoin futures market. It wrote:

Bitcoin Futures markets have seen a whirlwind 24hrs following Fed rate hikes yesterday. Over 26.5k $BTC worth of open interest was added to the market during yesterdays rally. However during the sell-off today, almost all of this open interest (~25k $BTC) has been closed out.

On the other hand, the global macros are playing a major spoilsport for Bitcoin investors. The U.S. reported a 10 percent inflation rate for April 2022. The U.S. inflation for the last month can be anywhere around 8.5 percent. Thus, we can expect central banks to announce more rate hikes in the coming year.

About Author

Bhushan is a FinTech enthusiast and holds a good flair for understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In his free time, he reads thriller fictions novels and sometimes explores his culinary skills.

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