Bitcoin plunged on friday as a major stock sell-off in the U.S. spooked the cryptocurrency market. Around $129 billion of value was wiped off the cryptocurrency market in a 24-hour period.
An absolutely bad day for stocks. NASDAQ, Dow, and S&P all landed firmly in the red. The Dow is not far off from its intraday low.
According to George, Host of CryptosRUs youtube channel, Bitcoin wasn’t the only one to take a hit following the Fed’s announcement. All the Gains of Thursday stock rally were erased on Friday as well.
The analyst highlighted in detail the biggest crash and its consequences on traders.
The Dow Jones industrial average lost 1,012 points, down 3.0%; the S&P 500 fell 3.5%, and the Nasdaq composite fell 4.7%.
Earlier it was predicted that May will be a good month for Bitcoin but the entire market is a plummet all because of the recent Fed decision this week which negatively impacted the cryptocurrency, especially as its price movement has correlated with the stock market recently.
The Market is Diving Low with a Fear of Inflation:
Nasdaq makes a steep dive on Thursday as the recession phantom haunts investors after the BoE’s quarter-point hike which was widely expected by the market, but the center’s banks updated the forecast for annual inflation to rise above 10 percent this year and the economy may contract later this year which has already spooked the investors.
The analyst pointed out the recent hike in the interest rate by 50 basis points by the Fed. This has led to its continued approach to policy tightening to tackle soaring inflation that has notched to 40-year highs.
Though Fed foresees that an ongoing increase in the target range will be appropriate for all the investors in the long term. This would be the Fed’s biggest hike in over two decades, showcasing its aggressive approach to tame mounting inflation.
Countries like Germany are facing inflation and so is the entire of Europe because the DXY is going up as again the DXY is made up of the u.s dollar versus the British pound versus the euro versus the yen and they’re all collapsing right.
George said
“The rising fear of inflation is also due to the ongoing war and the and supply chain issues and china yet again suffering from another covid and a lot of Europe is suffering from disruptions from ukraine of course russia whereas Russia is also threatening cut off oil and the list is long and a lot of stuff is happening around right now which is scaring the bejesus out of everyone. “
The massive sell-off has begun amidst the crisis
There is an enormous amount of sell pressure in the market right now and it is driving towards lower for people who have invested for a long term or leverage in general.
That’s the reason behind the deep selloff in stocks on Thursday—the tech-heavy Nasdaq Composite dived nearly 5% by midday—has caused digital assets to reverse course, and worse. Bitcoin’s rapid plummet brings it far below its level earlier this week to the lowest point in months.
George said this is the major sell-off since March this year, in Bitcoin which kicked off during the U.S. market open, potentially forecasting a market participant which continues to sell every bullish rally.
Will the Crypto Market Revive – and When?
It’s the question on everyone’s lips at the moment.
Will the crypto market bounce back or not, when and is it a good time to stick or twist? Over the course of last year’s trend, Bitcoin has seen its value surge 255.65% – even when you take into account the crypto crashes of 19 May and 8 June.
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Source: https://coinpedia.org/news/why-crypto-market-crashed-today/