Following a broad price swing last week, Bitcoin started off the final week of April with its lowest point in roughly six weeks.
Early in the day, on Monday, the world’s largest cryptocurrency market started up 1.3 percent from the previous 24-hour period. This brought the commodity shares to a value of $40,127. Prior to that, bitcoin had fallen to $38,202; the lowest value since March 15.
Analysts note that recent market volatility is the driving force of this dip. As you might expect, inflation concerns and the Ukraine-Russia crisis are big contributors to this. Contractionary monetary policies have also affected both the stock market and the crypto market, which have been moving in tandem of late.
Furthermore, the latest fall in prices could be potentially driven by immediate negative sentiment as more and more people are turning away from these more volatile assets. As a matter of fact, many investors have also shifted towards other products (like stablecoins) to help stave off risks in this period of uncertainty with a bearish outlook. Indeed, the current market status is a bit too hot, and these extremely high periods have traditionally been followed by dramatic market corrections.
As such, the crypto markets have taken a hit, with bitcoin failing to hold steady at the $40,000 level. This has led to fears about a Federal Reserve rate hike of 50-basis points.
Sure enough, Fed Chairman Jerome Powell has said, in response to the shifts, “it is appropriate, in my view, to be moving a little more quickly.” On that note, Powell goes on to say that raising the US benchmark interest rate by 50 basis points (which is the equivalent of 0.5 percent) will certainly be something to consider, going into the Federal Open Markets Committee in May.