The price of bitcoin has fallen below $ 40,000 while the crypto market is $ 440 million in liquidations

The price of bitcoin has fallen below $ 40,000 while the crypto market is $ 440 million in liquidations

Bitcoin has fallen 15% in the last 24 hours, falling below $ 40,000 for the first time since mid-March. Meanwhile, Ethereum fell 14%, retreating below $ 3,000 for the first time since March 22.

BTC traded at $ 39,783 at the time of writing, while Ether (ETH) fell to $ 2,978.54, according to Coingecko.

Investors are estimating the prospects for rising interest rates, a sharp rise in inflation and a disruption in global trade as a result of Russia’s attack on Ukraine, among other factors.

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Bitcoin is retreating to a monthly minimum

Faced with the threat of a further rate increase by the US Federal Reserve, Bitcoin, along with stocks, is falling to a monthly low. As a result, hundreds of millions of dollars were liquidated.

Market experts believe that the reduction of the central bank’s balance sheet puts pressure on the reduction of stocks and risky assets, whereby Bitcoin could potentially lose its appeal.

Decentrader’s co-founder, filbfilb, agreed with these serious winds, stating that the Fed’s action will have an effect on BTC’s price trend “in the coming months”.

Less exposure to speculative assets

Investors appear to be reducing their exposure to speculative assets, such as stocks and cryptocurrencies, in response to fears of inflation and a slowdown in economic development.

In addition, the 10-year treasury’s yield rose to a new three-year high of 2.77% on Tuesday, lowering the current value of expensive technology stocks.

Bitcoin, which is generally reasonably linked to the prices of other cryptocurrencies, has recently become more correlated with stock prices.

BTC total market cap at $765.42 billion on the weekend chart | Source: TradingView.com

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Last month, the correlation of the price of cryptocurrency assets with the S&P 500 reached 0.50, with -1 indicating that they are moving in complete opposition to each other, and 1 that they are moving in perfect synchronization.

According to Arcane Research, that was the highest rate since October 2020.

Nydig, a Bitcoin-focused asset manager, noted in a note to investors:

“Bitcoin investors remain concerned about rising interest rates and the possibility of tightening monetary conditions.”

The impending collapse of cryptocurrencies

BitMEX founder Arthur Hayes warned on Sunday of an “impending crypto massacre” and predicted that both Bitcoin and Ether would continue to fall further.

The billionaire, an investment banker who became a crypto mogul, predicted that Bitcoin and Ether would “fall long before the Fed moves” and reverse the course of its tightening policy.

Hayes expected the two leading cryptocurrencies to reach $ 30,000 and $ 2,500 by the end of June, respectively.

Within 24 hours, Coinglass reports that about $ 440 million has been liquidated in the wider crypto market. That totals 140,000 trades, one of which resulted in a loss of $ 10 million in one trade.

Featured image from Medium, chart from TradingView.com



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