Poor macroeconomic sentiment and increasing fears of recession in the West laid the backdrop for cryptocurrencies to lose some 4% of their market capitalization in the past 24 hours, with several major tokens taking hits of upto 8%.
In a note, Goldman Sachs analysts predicted that the Fed’s aggressive actions to contain inflation would almost certainly lead to a recession. The chances of an economic contraction — a period of the business cycle in which the economy as a whole is in decline – during the next two years are estimated to be around 35%, according to the bank.
Bitcoin (BTC) fell below $38,500 during Asian hours, reaching its lowest level in almost a month. This is despite the fact that April is a traditionally bullish month for the largest crypto, with prices rising seven times in the same month in the last ten years, according to data.
Ether (ETH) fell below $3,000 in the last week, losing 10% of its value. Solana’s SOL and Cardano’s ADA have both dropped 6.6% in the last 24 hours, while memecoins Shiba Inu (SHIB) and Dogecoin (DOGE) have both dropped as much as 7%.
DOGE prices plummeted after a brief gain last week, fueled by optimistic emotion as speculators bet on Elon Musk’s planned takeover of Twitter. Prices had crossed $0.15 at the moment, but had since fallen to $0.13 support over the weekend.
The decline in global markets, according to analysts, contributed to a drop in bitcoin and crypto prices.
Alex Kuptsikevich, the senior financial analyst at FxPro, said:
“Bitcoin declined for the second week in a row under negative stock market performance. Last week’s noticeable decline in bitcoin occurred amid a significant drawdown in US stock indices,”
Analysts warned that if bitcoin were to fall further, global crypto markets would have to underperform significantly.
“A consolidation scenario below $30K would require an absolute disaster in the financial markets. We have seen steady and impressive demand from long-term buyers as we have fallen into this area.”
On Monday, Asian markets and U.S. futures tumbled on fears that the Federal Reserve will tighten policy more quickly. The Sensex in India fell 2.01%, while the stock index in Singapore fell about 1%. In the United States, S&P 500 futures fell 0.26%, while the tech-heavy Nasdaq fell 0.37%.
The flagship crypto had previously reached $30,000 in July of last year, before recovering losses in the months following to reach lifetime highs of roughly $69,000 in November. Bitcoin’s lofty price forecasts have been shattered by profit-taking and declining macro-economic sentiment, with values plummeting 43% since then.
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