Bitcoin (BTC) saw a decline of nearly $1,000 in the initial hour of Wall Street trading on May 5, following a short-lived rally that ended in disappointment.
Nasdaq Plummets 4% After Fed Announcement
Market data from Cointelegraph Markets Pro and TradingView tracked BTC/USD as it slipped back to $38,130 on Bitstamp, almost a day after hitting weekly highs of $40,050.
The drop was prompted by the U.S. stock markets’ strong correlation, which displayed volatility after a brief uptick following the Federal Reserve’s statement on May 4.
As of the time of writing, the S&P 500 was down by 3%, while the Nasdaq 100 fell by 4.1%, all within the first hour of trading.
Ah, stocks dumping after one day reactionary rally.
Tale as old as time.
— The Wolf Of All Streets (@scottmelker) May 5, 2022
Traders seemed largely unaffected by the price movements across different markets, with the focus shifting to Bitcoin. Cointelegraph contributor Michaël van de Poppe suggested that there was a potential for Bitcoin to retest $38,000 without causing negative sentiment.
“As long as we stay above $38,000, everything looks fine for further continuation.”
Meanwhile, another trader, Cheds, emphasized the importance of the $37,500 level to prevent further downside risk.
Record Inflows for Purpose Bitcoin ETF
Analysts observed a positive trend in investor behavior despite concerns about large Bitcoin holders hesitating to buy at current price levels.
Reviewing the inflows into the Purpose Bitcoin ETF, analyst Jan Wuestenfeld highlighted a new record set on May 4, with a total of 2,900 BTC entering the ETF. This indicated a growing demand for BTC exposure among institutional investors.
“It might have been Powell’s comment yesterday that they are not considering 75bps hikes, which has caused people to jump back in,” Wuestenfeld speculated, alongside a chart from on-chain analytics firm Glassnode.
The assets under management of Purpose Bitcoin ETF were now close to reaching their all-time highs, only 2,000 BTC away.
The opinions expressed in this article are solely those of the author and not necessarily of Cointelegraph.com. Every investment decision carries some level of risk, so it’s essential to conduct thorough research before making any investment choices.
