London, England: Bitcoin (BTC) experienced a sharp decline below $57,000 in the European market on Wednesday, reaching its lowest point since February. This plunge marked the cryptocurrency’s worst performance since November 2022.
Over the past 24 hours, BTC has fallen by more than 8%, breaching the $60,000 support level. The broader crypto market, as indicated by the CoinDesk 20 Index (CD20), also suffered a considerable loss of nearly 9%.
The downturn in cryptocurrencies can be attributed to a prevailing risk-off sentiment in the financial markets, exacerbated by concerns of stagflation in the U.S. The country’s economy is grappling with signs of decelerated growth and persistent inflation, which have dampened hopes of an interest rate cut by the Federal Reserve. The Federal Open Market Committee is set to announce its latest rate decision later in the day.
In addition to Bitcoin, other major altcoins like Ether (ETH), dogecoin (DOGE), Solana (SOL), and avalanche (AVAX) also experienced significant declines, with losses ranging from 8% to 11%. This collective market downturn reflects the broader challenges facing the cryptocurrency sector amid increasing market volatility.
April witnessed Bitcoin’s first monthly loss since August, with a significant 16% decline that marked its worst performance since November 2022. This downturn comes in the aftermath of FTX crypto exchange’s collapse, underscoring the inherent risks and volatility associated with the cryptocurrency market.
The ongoing fluctuation in cryptocurrency prices underscores the sector’s susceptibility to external market forces and regulatory uncertainties. Investors and market participants are closely monitoring developments in the financial landscape, with an eye on potential policy changes that could impact the future trajectory of digital assets.