Bitcoin’s price declined to 7% because of a market correction, reaching as low as $67,000. Investors are taking profit, and market corrections have caused this drop, which frequently occurs in the crypto market.
In the last 24 hours, the top cryptocurrency decreased by around 7%, and in the last hour, it also went down to 0.12%. But in the last week, BTC has remained at around 1.50%.
The current crypto market cap is around $2.59 trillion, which is a 3.49% decrease in the last 24 hours. Top cryptocurrency has a market cap of $1.330 trillion, making up 51.35% of the total market. Stablecoins, on the other hand, have a market cap of $148 billion, which is 5.71% of the total crypto market cap.
Bitcoin Shows Volatility Once Again
On Friday, May 15, 2024, BTC dropped to its lowest level in a week, with trading unpredictable.
With this recent increase in its value, investors decided to sell immediately, especially after hearing about the higher inflation in the US.
Although it has gone back up to over $70,000 since then, it’s still lower than its highest peak ever of $73,700, which it reached on Thursday, March 14, 2024. Other assets like gold and the Nasdaq index have also had a tough time this week.
Some experts think the fall in the BTC from its record high is normal after a quick rise. Several reasons caused this drop, including worries about high prices and expected sales from Grayscale.
According to data from the Labor Department, consumer prices went up by 0.4% last month and by 3.2% compared to last year, which was more than what was expected. This made people worry that the Federal Reserve might not lower interest rates in May as they thought, leading to a sell-off of digital assets and stocks.
Also, Grayscale has been moving a lot of Bitcoin to Coinbase, possibly to sell it. Today alone, Grayscale moved over $400 million worth of Bitcoin to Coinbase, according to data from Arkham Intelligence.
This selling pressure from Grayscale is because investors are cashing in their shares in its Bitcoin Trust ETF, which changed from a closed-end fund in January. This means there’s more Bitcoin available in the market, pushing its price down.
Even with Grayscale selling off, other Bitcoin ETFs are seeing record amounts of money coming in, showing that people are still very interested in investing in Bitcoin.
How TradFi Dynamics Affect Crypto Trends
The markets reacted by lowering the chances of the Federal Reserve starting to lower interest rates in June. According to the CME FedWatch tool, there is about a 60% chance of a rate cut in June, down from around 74% a week ago.
Traders anticipate that interest rates will stay high for a long time in the United States. It typically has a negative impact on risky assets such as cryptocurrency.
However, bitcoin is still about 60% higher so far this year. Investors are driving the surge by putting their money into U.S.-traded crypto products, while traders are closely monitoring the potential for a global drop in interest rates by year-end.
A software company, MicroStrategy, announced plans to raise funds by selling bonds converted into stock, which would increase BTC’s value. This is the second time in less than ten days that they’ve done this.
Ethereum also dropped to its lowest point in a week, falling over 7% to $3,680. On March 5, the company announced it would offer $600 million worth of these bonds to invest more in the crypto market.
A well-known analyst named Rekt Capital is warning that Bitcoin might be heading into a risky period. He says it’s approaching what he calls the “Danger Zone,” which has been linked to drops in value before. Crypto expert Rekt Capital said Bitcoin might enter this “Danger Zone” in about four days.
Bitcoin is about 32 days away from halving, and its price has dropped by 11% this week. So, investors are eagerly waiting to see what happens next.
