A wave of selling and rising rates is plaguing the crypto market prompting digital assets to tumble to new all-time lows. Bitcoin fell about 15% and Ether is trading at $2,500 after a 20% dive. Altcoins are tumbling and scattering like a pack of cards and looking towards BTC for support.
But the world’s most popular cryptocurrency is struggling to hold on to the $38,000 range. In the last seven days, as per CoinMarketCap, bitcoin has lost around 15% of its value and is currently trading at $36,390. Various data analysis shows that a wave of selling that started on January 20 is ongoing taking BTC to a new low for 2022.
It’s not just the crypto market that has been affected. This week, Nasdaq Composite lost 7.6% and S&P 500 plunged 5.7% for a third consecutive week. The downturn has prompted investors to shed positions in riskier assets. Moreover, the Federal Reserve also has plans to reduce its balance sheet.
The crypto market, especially bitcoin has been hit badly because it serves as a hedge fund against rising inflation. Analysts believe a hawkish Federal Reserve may take out all that bitcoin’s worth. Meanwhile, Rekt Capital says the popular BTC is just floating inside the $38,000 – $43,100 range. Bitcoin needs dire support to avoid falling further. Rekt Capital believes that the $38,000 support area separates BTC from entering the $28,000-$38,000 consolidation range.
Edward Moya, a senior market analyst at Oanda expressed disappointment at BTC not reacting positively to the reversal in Treasury yields. Moya had predicted on Thursday that BTC would dive below the 40k mark with Russia’s proposal to ban the use and mining of cryptocurrencies. Russia has been very critical of cryptocurrencies because of their high volatility.
Fears of a further price crash is driving investors out of the most treasured crypto. Experts have even warned that the crypto market was quite close to a downturn. This has been driven by heightened regulations scrutiny, intense price fluctuations, and blanket bans on cryptocurrencies.