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Crypto Washout Sends Bitcoin Below $58,000 Ahead of Fed Decision
By Amanda Cooper
LONDON (Reuters) – Bitcoin fell almost 6% on Wednesday, after posting its worst monthly performance in April since late 2022, as investors pulled money from cryptocurrencies ahead of a decision on rates. interest of the Federal Reserve later.
The value of the world’s most-traded cryptocurrency fell nearly 16% in April as investors booked profits in a meteoric rally that took the price to a record high above 70 000 dollars.
Bitcoin fell 5.6% to its lowest level since late February. It fell 4.8% to $57,001, while ether’s losses were more modest, down 3.6% to $2,857, also the lowest since February.
Bitcoin’s price is now 22% below March’s record high of $73,803, putting it technically in a bear market. But it’s still up 35% year to date and double what it was this time last year, largely thanks to billions of dollars flowing into new exchange-traded funds since January.
“The recent downward trend can be attributed to increased profit-taking by investors who entered the market during the downturns of 2022 and 2023, as well as ETF investors who saw significant appreciation in the price of their shares after their entry into the market during the first weeks of 2024,” said Matteo Greco, research analyst at Fineqia.
Crypto-related stocks fell in pre-market trading in the United States. Shares of crypto exchange Coinbase fell 4.6%, while those of miners Riot and Marathon Digital fell 4.2 to 4.3%.
On the macroeconomic front, the Federal Open Market Committee (FOMC) is unlikely to change interest rates, but the growing view among investors is that the central bank may not cut interest rates. all this year, which would be a major blow to interest rates. rate-sensitive assets such as cryptocurrencies, emerging market stocks and bonds or even commodities.
Investors reacted accordingly. The 10 largest spot Bitcoin ETFs in the United States are facing their biggest weekly outflow since their inception in January.
Outflows totaled $496 million this week, mainly because flows into BlackRock’s iShares Bitcoin Trust, the largest by holdings, slowed, according to LSEG data.
Even smaller altcoins, which can sometimes benefit from the weakness of the two big tokens, have been punished. Data from crypto website Coingecko shows that Solana’s sol token has lost almost a quarter of its value over the past seven days, as have meme coins dogecoin and shiba inu – both made popular in 2021 in part by Tesla owner Elon Musk.
Bitcoin’s so-called “halving event” last month did little to support the price. Since April 20, when the halving took place, bitcoin has fallen approximately 15%. Many investors have invested in the market in the run-up to the event, which involves a change in the cryptocurrency’s underlying technology intended to reduce the speed at which new bitcoins are created.
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From a charting perspective, Alex Kuptsikevich, senior market analyst for the FXPro platform, said that bitcoin’s decline is entering a new stage.
Not only is May a month of seasonal weakness for Bitcoin, but the price decline over the past few weeks highlights $55,700 and $51,000-52,000, he said.
“However, FOMC announcements later today and monthly employment data on Friday have enough potential to accelerate or reverse the downtrend,” he said.
(Reporting by Amanda Cooper, additional reporting by Samuel Indyk; editing by Stefano Rebaudo, Ros Russell and Louise Heavens)