The crypto market bulls began to lose grip as the crypto market cap tumbled from $2.34 trillion to $2.20 trillion, causing investors to lose another $150 billion after a massive $250 billion liquidation in the last few days. Bitcoin price plunges to a low of $59,120 on Wednesday, down 6% over 24 hours and 11% in a week. Traders anticipate a further drop in BTC price to as low as the $47K level.
Ethereum price drops more than 6% to a low of $2,918. Other altcoins such as Solana (SOL), XRP, Toncoin (TON), Cardano (ADA) also tanked 5-10% in the past 24 hours. Meme coins Dogecoin (DOGE) and Shiba Inu (SHIB) suffered more with an over 9% drop.
The crypto market sentiment has worsened as Crypto Fear & Greed Index fell to 54 (neutral) today from 67 (greed) in a day.
Why Bitcoin and Crypto Prices Are Falling Today?
Bitcoin and crypto prices tanked amid panic selling as fears of higher-for-longer U.S. interest rates mount ahead of the Federal Reserve monetary policy decision on May 1. Investors took hawkish cues from the Fed likely to keep interest rates unchanged at 5.25%-5.50%, but Chair Jerome Powell can shift to fewer rate cuts this year from three rate cuts announced earlier.
The recent PCE data indicated persistent inflationary pressures and Q1 GDP growth of 1.6% showed stagflation. The prediction market estimates just one Fed rate cut for this year, mainly causing the crypto market to correct.
Meanwhile, the US dollar index (DXY) has climbed to 106.45, marching toward six-month highs. The US 10-year Treasury yield (US10Y) jumped further to 4.688%. The rise in numbers indicates inflationary pressure impacting Bitcoin price. Traders await the Q2 2024 Treasury refunding announcement as it could bring some recovery in Bitcoin.
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No Support From Bitcoin ETFs
US spot Bitcoin ETF fails to support, with $161 million Bitcoin ETF outflows on Tuesday following a major correction on Wall Street. With this, the market has witnessed five consecutive days of outflows. Six spot Bitcoin and Ethereum ETFs in Hong Kong recorded only $12 million in trading volume on day 1, which is 383 times lower than U.S. Bitcoin ETFs debut.
Institutional investors seem to have lost hope in Bitcoin ETF and likely to refrain from investing unless any positive developments.
Coinglass data shows more than $435 million were liquidated across the crypto market in the selloff. Among them, $383 million long positions were liquidated and over $52 million short positions were liquidated.
Over 139K traders were liquidated and the largest single liquidation order happened on crypto exchange OKX as someone swapped ETH to USD valued at $6.07 million.
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Analysts Predicts Fall to Higher $40K Levels
Crypto analyst Michael van de Poppe predicts Bitcoin price is now at the end of the correction and can fall to a low of $56-58K. “It’s already down 20% from the highs and we’ll have some more downside to happen from here,” he added.
Veteran trader Peter Brand is more bearish on Bitcoin price. He said the BTC price has topped and the charts look like a descending triangle, indicating a drop in prices until broken. He predicts a dip to $47-49K before the bull market resumes until 2025.
Perhaps dip into high 40s, then bull resumes
— Peter Brandt (@PeterLBrandt) May 1, 2024
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The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
