Top Cryptocurrencies have lost 3-5% across the board, wiping out much of the gains made since the beginning of the month. While Bitcoin was not the hardest affected, the largest cryptocurrency in the world fell below $40,000 in the decline.
Bitcoin plummeted below the $40,000 mark for the first time since March 16 on Tuesday, the biggest drop in weeks. After reaching a high of $47,106 thanks to the enthusiasm produced by the Bitcoin conference in Miami, the commodity has dropped as much as 13.26% this week.
Several theories have been proposed in an attempt to explain why prices are falling. The increasing correlation between Bitcoin and the US stock market, which has been followed since the beginning of the year, has been cited by various pundits as a crucial cause.
The Nasdaq 100 was trading below its moving average at the start of last weekend, and it was predicted that Bitcoin would lose some value in tandem with stocks.
The weekend heightened rumors of the Fed tightening monetary policy, which most certainly contributed to the price drop. Analysts believe that the Federal Reserve will raise interest rates as inflation threatens to hit 9% for the first time in over 40 years.
Satori Research’s CEO, Teong Hng, stated:
“Fed tightening by 0.5 percentage point steps at the upcoming meeting as well as $95 billion per month balance sheet run-off sent crypto markets spiraling lower,”
Bitcoin has dropped nearly 8% in the last week, bringing its market cap below $800 billion for the first time in weeks. As traders sought to comprehend the raging chaos, the asset managed to maintain a market domination of over 40% while trading volume rose to 117.07%.
The large price drop that slammed the markets this week did not seem to impact Bitcoin the hardest, instead altcoins appeared to bear the brunt of the blip. Avalanche’s AVAX has lost 10.69% in the last seven days among the top ten largest cryptocurrencies, while LUNA has lost 18%.
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