As of 5 p.m. Friday, on Coinmarketcap, the global crypto market cap stood at $1.66T, down 7.73% from the last day.
Following Wednesday’s US Federal Reserve meeting statement, the world’s largest digital currency by value rose sharply to challenge the $40,000 resistance, but has since fallen 9.40% to $36,200, the biggest drop in the previous four months.
“Wild swings in the crypto market are common, but the difference now is that they seem to follow Wall Street rather than on-chain data or crypto-related news,” said Mani Thawani, founder of Mundo Crypto.
US stocks and cryptocurrencies rose after Fed Chairman Jerome Powell’s press conference – the S&P 500 and Dow Jones gained more than 2% – but the gains were short-lived.
On Thursday, tech stocks — the Nasdaq was down 5% — and cryptocurrencies plunged.
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“Global crypto and equity markets continued to move south as sellers dominated traditional and crypto markets throughout the week,” said Shivam Thakral, CEO of BuyUcoin.
Major altcoins were also trading in red.
Ethereum, the second most valuable cryptocurrency, fell 8.47% to $35,830.
Solana was at $81.30 (-12.19%), Cardano $0.7834 (-9.74%), Binance Coin $374 (-7.80), Polkadot $14.15 (-11.58) , Avalanche $56.39 (-14.60%) and Dogecoin $0.1266 (-6.38%).
Experts say that stock and crypto markets will remain volatile for the near future due to concerns about inflation, the Russian-Ukrainian war, and soaring oil prices.
Risky assets like tech stocks and crypto are also affected, as bond yields have risen lately.
Over the past few months, market participants have recorded a correlation between IT stocks and the crypto market, as they have often moved in tandem.
Market watchers say Bitcoin will face test periods in the coming weeks.
“A breakdown of the $34,752 support level could trigger a crash. On-chain metrics and techniques are finally looking at the possibility of a capitulation at $30,000 or lower,” said Thawani, Founder of Mundo Crypto. “A weekly candlestick close above $52,000 will invalidate the bearish thesis.”
Amid the increasing volatility of digital assets and the high tax rate levied by the Indian government, retail investors are very nervous.
“Indian investors have been hit by the high tax rate and now the collapse has further compounded their misery. Last year, a record number of young investors entered the market, and most of them now have portfolios in the red. Some have even seen erosion of the value amounting to 50 to 70% of their portfolio. I now feel that many are pulling out of the crypto market. The euphoria of 2021 is definitely over,” said Vishal Gupta, a popular Noida-based commentator.
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