After bitcoin broke through the $40,000 mark on Wednesday, May 4, the rate of the first cryptocurrency fell sharply by almost $4,500, reaching a two-month low. The main altcoins followed Bitcoin.
Just a few days ago, Bitcoin began to recover after the recent fall of the rate below $38,000. Previously, the bullish trend pushed BTC up after the meeting of the US Federal Reserve’s Open Market Committee. The Fed announced that it would raise the base rate by 50 points instead of 75, as a result, the bitcoin rate exceeded $40,000. However, the rise was short-lived, bitcoin began to fall sharply after the final decision of the Fed and the movement of assets caused by it in the stock market.
Investors considered the Fed’s policy aggressive and concluded that the central bank cannot stop runaway inflation. The sale of securities led to a sharp drop in the S&P 500, Dow Jones and Nasdaq. This could not but affect the cryptocurrency market, given the high price correlation of bitcoin with some traditional assets.
In addition to the “lightning strike” on bitcoin, altcoins also ended up in the “red zone”. So, ETH fell from $2965 to $2673, while SOL fell from $95.25 to $81. The BNB coin rate also showed a rapid drop from $413 to $370, DOT dropped sharply from $16.45 to $14.02, and XRP fell to $0.5801. The total capitalization of the cryptocurrency market is now $1.6 trillion, although back in April it reached $1.8 trillion. The market capitalization of bitcoin is $685.1 with a daily trading volume of $47.7 billion. data Coinglass, over the past 24 hours, during the forced closing of margin positions, cryptocurrency traders have lost more than $460 million.
A few days ago, macro strategist Lyn Alden suggested that the Luna Foundation Guard’s active acquisition of bitcoin could lead to a drop in the LUNA price, and this in turn could provoke a bearish trend in the bitcoin market.
Source: Bits
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