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.
A very bad day for equities. NASDAQ, Dow and S&P all landed firmly in the red. The Dow Jones is not far 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 for 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%.
Previously, it was predicted that May would be a good month for Bitcoin, but the whole market is in free fall due to the recent decision of the Fed this week which had a negative impact on the cryptocurrency, from especially since its price movement has recently been correlated with the stock market.
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 to the recent 50 basis point interest rate hike by the Fed. This has led to its continued policy-tightening approach to tackling soaring inflation that has reached 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 as is the whole of Europe as the DXY is rising as the DXY is made up of the US dollar against the British pound against the euro against the yen and they s all collapse.
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 sale started in the middle of the crisis
There is huge selling pressure in the market right now and this is pushing down for people who have invested long term or leveraged 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 it was the main selloff since March of this year in Bitcoin that started when the US market opened, potentially anticipating a market player that 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 rebound or not, when and is it the right time to stick or twist? Over the course of the last year, Bitcoin saw its value surge by 255.65% – even taking into account the crypto crashes of May 19 and June 8.
