Bitcoin experienced a surge in value last week due to a stock market rally triggered by recent actions from the US Federal Reserve. However, similar to major stock indexes, Bitcoin’s upward trend abruptly shifted to a downward spiral, losing value rapidly since Thursday without a respite. As of this morning, the decline continues, with Bitcoin’s value dropping from around $40,000 to $32,000. This substantial drop not only poses a significant downturn but also places Bitcoin below the critical psychological threshold of $33,000.
Katie Stockton, founder of Fairlead Strategies, commented, “Bitcoin is mirroring the stock market’s decline, following a weak April. Short-term momentum has weakened… and Bitcoin is no longer in oversold territory from a short-term perspective.”
At the moment, there isn’t an immediate expectation for Bitcoin’s value to rebound. However, some analysts suggest that the stock market could begin to recover this week. If this prediction holds true, cryptocurrencies’ values may also see an uptick, as their value often correlates closely with major stock markets, especially in the technology sector.
Bitcoin Fear and Greed Index is 11 – Extreme Fear
Current price: $32,799 pic.twitter.com/pPFuXoayAG— Bitcoin Fear and Greed Index (@BitcoinFear) May 9, 2022
One crucial factor to watch is the upcoming release of new US inflation data scheduled for this Wednesday. Yuya Hasegawa, a crypto market analyst at the Japanese bitcoin exchange Bitbank, informed investors, “If the CPI doesn’t show signs of slowing down, it will increase concerns about faster monetary policy tightening. However, other inflation indicators are beginning to slow down, and if the April CPI follows suit, it will likely ease market concerns and improve risk sentiment.”
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