The $40,000 benchmark is an important level for bitcoin as according to experts, how the cryptocurrency performs from there could determine whether the market enters another bullish or bearish phase.
Cryptocurrencies Crashed and Recovered
$95 billion per month balance sheet run-off as Fed hammers crypto markets with 0.5 percentage point moves in upcoming meetings,” said Teong Hung, chief executive of Hong Kong-based Satori Research. Dogecoin and Shiba Inu each declined by about 10 percent, but like the other coins, they have since recovered by 4 percent and 20 percent, respectively.
According to Arthur Hayes, co-founder of crypto trading platform BitMEX, speculation is rife that bitcoin could drop to around $30,000 by June. Similarly, Ether, which has already dropped below $3,000, could reach around $2,500. ,Bitcoin and Ether are highly correlated to the Nasdaq 100. If NDX Tanks, It Will Take Crypto Down With ItHayes said.
According to David Duong, Head of Institutional Research at Coinbase Global Inc., investors are selling cryptocurrencies ahead of the mid-April tax deadline in the US. This could be the reason why there is a downfall in the cryptocurrency market. Interestingly, this trend was also seen in 2021. “Last year we saw market players selling digital assets to make tax-related paymentsDavid said in a recent note. He further added that crypto investors are also putting pressure on risk-on assets as the Fed hikes interest rates.
Furthermore, bitcoin’s nature of moving in line with assets such as US tech stocks makes the decline much less surprising after a tepid week for US markets. Its correlation with the Nasdaq 100 index is again at record levels.