Crypto Market Shakes Up As Bitcoin Falls Down to $58000

Bitcoin experienced a nearly 6% decline on Wednesday, marking its worst monthly performance since late 2022 in April, as investors withdrew funds from cryptocurrencies ahead of an impending interest rate decision by the Federal Reserve.

During April, the value of the world’s most traded cryptocurrency plummeted by nearly 16%, as investors cashed in profits following a remarkable rally that propelled the price to record highs surpassing $70,000.

Bitcoin tumbled by as much as 5.6% to its lowest level since late February. It was last observed to be down 4.8% at $57,001. Meanwhile, losses in ether were comparatively milder, decreasing by 3.6% to $2,857, also marking its lowest level since February.

Presently, the price of bitcoin is approximately 22% below the record high of $73,803 recorded in March, technically placing it in a bear market.

However, it has surged by 35% since the beginning of the year and has doubled compared to this time last year, primarily due to the substantial influx of capital into newly established exchange-traded funds since January.

Bitcoin Cryptocurrency

Fineqia research analyst Matteo Greco attributed the recent downtrend to increased profit-taking by investors who entered the market during the downturns of 2022 and 2023, as well as ETF investors who witnessed significant price appreciation on their shares after entering the market in the early weeks of 2024.

In U.S. premarket trading, stocks related to cryptocurrencies experienced declines. Shares in crypto exchange Coinbase fell by 4.6%, while those in miners Riot and Marathon Digital dropped by 4.2-4.3%.

On the macroeconomic front, the Federal Open Market Committee (FOMC) is not anticipated to alter interest rates, but there is a growing sentiment among investors that the central bank may refrain from cutting rates at all this year.

This prospect is detrimental to interest rate-sensitive assets like cryptocurrencies, emerging market stocks and bonds, or even commodities. In response, investors have taken action. The ten largest U.S. spot bitcoin ETFs are witnessing their largest weekly outflow since their inception in January.

Bitcoin (Credits: Shutterstock)

Outflows amount to $496 million this week, primarily due to a slowdown in flows into BlackRock’s iShares Bitcoin Trust, which holds the largest holdings, according to LSEG data. Even smaller alt-coins, which can sometimes benefit from weakness in the two major tokens, have been adversely affected.

Data from crypto website Coingecko reveals that Solana’s sol token has depreciated by almost a quarter of its value over the last seven days, along with meme coins like dogecoin and shiba inu, both of which gained popularity in 2021 partly due to Tesla owner Elon Musk.

Despite Bitcoin’s “halving event” last month, which involves a modification to the cryptocurrency’s underlying technology aimed at reducing the rate at which new bitcoins are generated, the event has had little impact on propping up the price.

Since April 20, when halving occurred, bitcoin has witnessed a decline of approximately 15%. Many investors entered the market in anticipation of the event, but the subsequent performance has been disappointing.

Josh Alba
Josh Alba
Josh Alba stands at the forefront of contemporary business journalism, his words weaving narratives that illuminate the intricate workings of the corporate world. With a keen eye for detail and a penchant for uncovering the underlying stories behind financial trends, Josh has established himself as a trusted authority in business writing. Drawing from his wealth of experience and relentless pursuit of truth, Josh delivers insights that resonate with readers across industries.
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