- Investors are focused on the Federal Reserve’s next move, expecting a spike in benchmark interest rate.
- The crypto economy shrunk nearly 9% over the past week, as cryptocurrencies bleed.
- Analysts fear further decline in Bitcoin price as the asset struggles to recover from the crypto bloodbath.
Investors are awaiting the Federal Reserve’s decision on benchmark interest rates. Bitcoin’s correlation with top US stocks remained high as the market posted significant losses, Nasdaq hit its worst four-month performance since 1971.
Bitcoin price struggles to recover from its downtrend
Top US stock indexes witnessed significant losses over the past week. Nasdaq had its worst four-month performance in fifty years, and Bitcoin’s high correlation with tech stocks increased selling pressure on the asset.
Crypto markets were hit by a bloodbath as stocks struggled to recover. The crypto economy shrunk to $1.79 trillion in a market where investors are fearful. Proponents believe Federal Reserve could raise the benchmark interest rates aggressively. Typically, an aggressive rise in interest rates is met with increasing selling pressure on cryptocurrencies and tech stocks.
Previously, Bitcoin price has plummeted in response to similar events. Since the Nasdaq composite had its worst four-month performance in 50 years, experts believe the Fed’s decision on a rate hike could influence Bitcoin and stock prices further.
Analysts at the ING Group were quoted in a report published on April 28,
The Federal Reserve is widely expected to raise its policy rate by 50 basis points next Wednesday as 8%+ inflation and a tight labour market trump the surprise 1Q GDP contraction attributed to temporary trade and inventory challenges.
There is an increased likelihood of rate tightening from the Federal Reserve. Analysts have evaluated the Bitcoin price trend and the impact of recent events on the asset.
@BTC_NFT, a crypto analyst and trader, believes Bitcoin price could plummet to $36,000, and this is the best time to average more in the asset.
Plan stays the same. Nothing else to change regarding it. Either price moons from here and we ride our 38,500 longs, or price dumps into 36,000 and we average in more. $BTC https://t.co/KQ9gkiQq6a pic.twitter.com/dOofNTCNsd— Symdroid | Shuvo (@BTC_NFT) April 30, 2022
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