At 5 PM on Friday, on Coinmarketcap, the global crypto market cap stood at $1.66T, a 7.73 % decrease over the last day.
Following the US Federal Reserve meeting statement on Wednesday, the world’s largest digital currency by value climbed sharply to challenge the $40K resistance, but has since dropped 9.40 percent to $36,200 levels, the biggest drop in the previous four months.
“Wild swings in the crypto market are common, but the difference now is that they seem to follow Wall Street as opposed to on-chain data or crypto-related news,” said Mani Thawani, Founder, Mundo Crypto.
US stocks and cryptocurrencies rose after Fed Chairman Jerome Powell’s press conference—the S&P 500 and Dow gained more than 2%—but the gains were short-lived.
On Thursday, tech stocks—Nasdaq was down 5%—and cryptocurrencies nosedived.
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“The global crypto and stock markets continued to move south as sellers dominated the traditional and crypto markets throughout the week,” said Shivam Thakral, CEO, BuyUcoin.
The major altcoins were also trading in red.
Ethereum, the second most valuable cryptocurrency, fell 8.47 percent to $35,830.
Solana was at $81.30 (-12.19 %), Cardano $0.7834 (-9.74%), Binance Coin $374 (-7.80), Polkadot $14.15 (-11.58), Avalanche $56.39 (-14.60%) and Dogecoin $ 0.1266 (-6.38%).
Experts say that the stock and crypto markets will remain volatile in the near future due to concerns regarding inflation, the Russia-Ukraine war, and surging oil prices.
Risky assets like tech stocks and crypto are also being hit as bond yields have been rising lately.
Over the last few months, market participants have recorded a correlation between IT stocks and the crypto market as they have often moved in tandem.
Market watchers say that Bitcoin will have to face testing times in the next few weeks.
“A breakdown of the $34,752 support level could trigger a crash. On-chain metrics and technicals are finally considering the possibility of a capitulation move to $30,000 or lower,” said Thawani, Founder, Mundo Crypto. “A weekly candlestick close above $52,000 will invalidate the bearish thesis.”
Amid the rising volatility amongst digital assets and the high tax rate levied by the Indian government, small investors are a nervous lot.
“The Indian investors were impacted by the high tax rate and now the meltdown has further added to their misery. Last year, a record number of young investors entered the market, and most of them now have portfolios in the red. Some have even seen value erosion amounting to 50–70% of their portfolio. I can now sense that many are withdrawing from the crypto market. The euphoria of 2021 is definitely over,” said Vishal Gupta, a popular Noida-based crypto commentator.
