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Amid a carnage in the market, cryptos were not spared, and Bitcoin has fallen nearly 10% in the past 24 hours from May 6, according to CoinMarketCap.
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After a brief market rally following the Fed’s decision to hike rates by half a point, markets reversed violently and continued to slide further on May 6.
Brock Pierce, Bitcoin Foundation Chairman, told GOBankingRates that the sell-off in Bitcoin and other cryptocurrencies has been mainly driven by the technology-led global market sell-off. “There are many positive catalysts for Bitcoin, and with the positive steps taken recently by states and countries to move towards a more favorable approach to cryptocurrency, it is only a matter of time before Bitcoin resumes its upward trend,” he added. to.
On May 5, the Dow Jones Industrial Average recorded its worst day since 2020, dropping 204 points — or 0.6% — the S&P 500 lost 0.6%, while the Nasdaq Composite lost 0.7%, CNBC reported.
Bitcoin hovered around $35,500 on May 6, a sharp 9.7% drop in the past 24 hours, according to data from CoinMarketCap. About $129 billion in value was wiped from the cryptocurrency market in a 24-hour period, CNBC reported. The asset is also down 48.3% from its all-time high of $69,044, which it reached in November 2021, according to CoinGecko.
Chris Brookins, Co-Founder and CEO of RociFiGOBankingRates told GOBankingRates that he suspects we are in the early stages of a deeper sell-off with Bitcoin and the crypto industry in general. “Basically, I don’t think we’ve hit rock bottom yet,” he said. “We may be entering a world that crypto has never experienced before – a recession. And the associated macro conditions that lead to this are simply being prepared for the so-called paperhands to sell their crypto, because they have their technical stocks. Bitcoin and Ethereum are struggling, and of course altcoins are likely to struggle even more.
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Brookins added that if you have a long-term investment horizon, now could be a good time to scale up to solid crypto assets, as Bitcoin approaches its year-long low, and is unlikely to break again. “So if you’re looking to buy and hold, it’s always good to start with caution when there’s proverbial blood flowing through the streets,” he added, while also pointing out Ethereum’s relative strength in this market – which is below the same percentage as Bitcoin, but well above the annual low. This, he said, “shows that Ethereum can gain ground on Bitcoin for overall market dominance. In addition, other aspects of the crypto market are active, such as NFTs and various DeFi protocols.”
Ether was down 5.3% in the past 24 hours, as of midmorning May 6, and altcoins had largely fallen as well, according to CoinMarketCap.
Russell Starr, CEO of DeFi TechnologiesGOBankingRates told GOBankingRates that with macro conditions as bad as they have been, it is impressive that the markets have held out for as long as they have. “It is difficult to predict exactly where such a sell-off will end, but it is not unreasonable to think that Bitcoin will fall to the low of $33,000 it reached in January,” he stated. “Between rising interest rates, high inflation and the looming possibility of a recession, the price is largely held up by hope right now,” he said.
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However, he nuanced his view by saying that the crypto ecosystem “is so much more than the price of Bitcoin today.”
“It’s not really time to panic until we start to see the other systems being abandoned, such as the DeFi protocols and the NFT marketplaces. As long as those are still used, the crypto ecosystem will continue to grow, despite falling prices,” he added. For example, if you want to make a profit on an exponential scale, DeFi could be a good place to look here. There are a number of protocols that are also seeing prices fall, meaning now might be a good time to invest.”
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About the author
Yael Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including: Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major New York City financial firms, including New York Life and MSCI. Yael is now a freelancer and most recently co-authored the book “Blockchain for Medical Research: Accelerating Trust in Healthcare”, with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in journalism from New York University and one in Russian studies from Université Toulouse-Jean Jaurès, France.