The Сryptocurrency market took a harsh tumble as Bitcoin plunged below $58,000, signaling a shift into a bear market. This marks Bitcoin’s third consecutive day of decline, following its worst monthly performance since late 2022 in April. Investors are withdrawing funds from cryptocurrencies before the Federal Reserve’s interest rate decision.
Bitcoin’s value plummeted nearly 16% in April, prompting investors to cash in on profits from its recent surge to record highs above $70,000. Currently trading at $57,055, its lowest since February, Bitcoin is down 4.7%, while Ether experienced a more modest 3.6% drop to $2,857, also hitting its lowest point since February.
With Bitcoin now 22% below March’s peak, it technically enters bear market territory. Nonetheless, it remains 35% up for the year and twice its value compared to this time last year, largely due to significant investments in newly created exchange-traded funds since January.
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Concerns about the Federal Reserve’s stance on interest rates are mounting, with investors speculating that the central bank may refrain from rate cuts this year. This uncertainty affects interest rate-sensitive assets like cryptocurrencies, emerging market stocks, bonds, and commodities. Consequently, the ten largest U.S. spot bitcoin ETFs are witnessing their largest weekly outflow since their inception in January, totaling $496 million this week.
Not even the recent “halving event” could bolster Bitcoin’s price. Since the event on April 20, which aims to reduce the rate of new Bitcoin creation, the cryptocurrency has experienced a 15% decline. Despite anticipation leading up to the halving, which involves a fundamental change in the cryptocurrency’s technology, investor sentiment failed to sustain the market.
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