Earlier today (May 10), Bitcoin (BTC) plunged below $30,000 for the foremost time since July 2021 as the cryptocurrency market followed plummeting traditional markets with investors startled by fierce hawkish policy tightening and rising inflationary pressure.
The numero uno crypto by market cap declined to a low of $29,764 earlier today, before rebounding to over $30,000. The decline was a continuation of a fall that started recently as investors moved out of riskier assets. Notably, the value of Bitcoin has fallen by about 55% from the peak of $69,000 recorded in November.
Even though cryptocurrency advocates perceive Bitcoin as an asset to negate inflation, a huge chunk of conventional investors continue to categorize it as a riskier asset. Investors have been liquidating Bitcoin and the rest of the digital tokens in addition to volatile assets such as tech stocks, with the US Fed starting to normalize interest rates to counter almost four-decade high inflation.
Edward Moya, senior market analyst for the Americas at Oanda, stated that Bitcoin has broken some major technical levels against the backdrop of non-stop selling on Wall Street.
He further stated the institutional investor is closely tracking Bitcoin as many investors who entered the nascent sector last year are now bleeding on their investment.
Moya stated that even though there is no change in the long-term fundamentals of the asset, there are rising worries about slowing economic growth and likely recession, which could prove cumbersome for the crypto industry.
He further stated that no one is looking at the option of buying the dip as of now and that has left Bitcoin more vulnerable to price declines.
The decline in the price of cryptocurrency has mirrored the US equities and other markets collapse, with the tech-focused Nasdaq losing 4.30% Monday. Also, the S&P 500 fell 3.2%, while the Dow lost 2%.
