Bitcoin has reached its weakest point since last July.
Last week, cryptocurrency Bitcoin saw benefits from a major stock rally brought about by the latest moves from the United States Federal Reserve. However, much like the major stock indexes, Bitcoin’s rally suddenly turned into a freefall, shedding value rapidly since Thursday with no break. As of this morning, the freefall is still in progress, with Bitcoin’s value plummeting from a high of approximately $40,000 to $32,000. Not only is this a major drop-off in itself, it’s potentially hazardous to Bitcoin in particular, as it places it below the key psychological level of $33,000.
“Bitcoin has followed the lead of the equity market, extending lower after a weak April,” Katie Stockton, founder of Fairlead Strategies, said in a note to investors. “Short-term momentum has deteriorated … and bitcoin is no longer oversold from a short-term perspective.”
Currently, Bitcoin values aren’t immediately projected to recover, though some analysts suggest that the equities market could start building back this week. Assuming this is true, crypto values could receive a kickback, as the value of cryptocurrencies is often tightly woven into major equities markets like technology.
Bitcoin Fear and Greed Index is 11 – Extreme Fear
Current price: $32,799 pic.twitter.com/pPFuXoayAG
— Bitcoin Fear and Greed Index (@BitcoinFear) May 9, 2022
One major factor to wait for is the release of new US inflation data, scheduled to be made public this Wednesday. “If the CPI shows no sign of slowing down, it will add to the fear of faster monetary tightening,” Yuya Hasegawa, crypto market analyst at Japanese bitcoin exchange Bitbank, told investors. “But other inflation metrics are starting to slow down and the April CPI could follow suit, which in turn will likely alleviate the market’s concern and help recover its risk sentiment.”