Bitcoin Dips Below $57,000 Amid Crypto Market Turbulence
Bitcoin (BTC) slid by over 6% to trade just below $57,000 on May 1, ahead of an interest rate announcement by the US Federal Reserve scheduled for the same day. The fall was in line with the broader crypto market, with major altcoins like Ethereum (ETH) also registering a decline. ETH was down by almost 6%, trading just below $2,900, according to Coingecko.
Bitcoin’s performance on May 1st marked one of its poorest showings since November 2022, following the notable decline observed last month. The world’s most valued crypto fell by almost 16% in April, as investors capitalized on gains from a previous rally that had pushed the coin’s value over $70,000.
The value of Bitcoin is currently 22% below March’s record of $73,803, which technically places the crypto in a bear market. However, Bitcoin has still registered an increase of 35% year-to-date and doubled in value when compared to the same time last year. This increase can be attributed to the billions of dollars flowing into the newly established Exchange-Traded Funds (ETFs) since January.
“The recent downtrend 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 witnessed significant price appreciation on their shares after entering the market in the early weeks of 2024” Fineqia research analyst Matteo Greco said to Reuters in a statement.
The decline in crypto also affected related stocks in US pre-market trading. Shares of major crypto exchanges like Coinbase, as well as crypto mining companies like Riot and Marathon Digital, also registered a decline of over 4%.
Growing belief over the Fed maintaining a steady interest rate throughout the year had investors pulling funds out of risk-sensitive assets like cryptocurrencies. However, the decline was momentary as the wider crypto market registered a rebound after the Federal Open Market Committee (FOMC)’s interest rate decision.
