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Bitcoin falls below $40,000 in 24 hours, Ethereum falls below $3,000

April 12, 2022

Latest company news about Bitcoin falls below $40,000 in 24 hours, Ethereum falls below $3,000

On April 12, Beijing time, the cryptocurrency market ushered in a retracement.

Market data shows that Bitcoin fell 15% in 24 hours, and the latest quotation was $39,682, falling below $40,000 for the first time since March 15. Meanwhile, Ethereum fell 14% and was last quoted at $2,969, falling below the $3,000 mark for the first time since March 23.

As Bitcoin and Ethereum retreated, the overall market capitalization of cryptocurrencies was also affected. According to data from CoinMarketCap, the crypto market fell 8.5% in 24 hours, and its market value shrank to $1.84 trillion.

The correction of the cryptocurrency is once again related to the US stock market. All three major U.S. stock indexes closed in losses, with the S&P 500 closing down 1.7 percent, the Dow Jones Industrial Average closing down 1.2 percent on Monday, and the tech-heavy Nasdaq down 2.2 percent.

This is also one of the trends in which cryptocurrencies and U.S. stocks have become increasingly close in recent years. According to CoinMetrics’ chart data, the correlation coefficient between Bitcoin and the S&P 500, one of the three major U.S. stock indexes, reached 0.49 at the end of February. Close to the previous extreme value of 0.54. The higher the number, the stronger the correlation between Bitcoin and the S&P 500. This is in line with data from Bloomberg, which showed a correlation between cryptocurrencies and Nasdaq of 0.73 in early February 2022.

The macro background of this cryptocurrency pullback is complex, and the factors that disturb the market sentiment are as follows:

The first is that the conflict between Ukraine and Russia is not over yet, and it is showing a lasting trend, and the all-round impact on the world political and economic structure is constantly being transmitted to the financial market.

On the other hand, the impact of the new crown epidemic has continued to this day, and its pressure on the supply chain of the global economy has continued, which has also affected global investors' expectations for the speed of economic recovery.

The most important thing is that after the above-mentioned unstable factors are superimposed, the Federal Reserve, the bellwether of global finance, decided to actively raise interest rates and cut off the supply of funds to the economy, which makes the market outlook even more uncertain.

In the cryptocurrency space, some people have expressed pessimism about the market outlook.

Arthur Hayes, the former CEO of cryptocurrency exchange BitMEX, posted a blog on April 11 expressing his confidence in the future of cryptocurrency, but may see a “plunging” in the near term.

After analyzing the global situation, Arthur Hayes believes that as the Federal Reserve seeks to fight inflation and the capital injected into the economy decreases, not only the stock market, but also the market value of cryptocurrencies is likely to shrink. He called "we are on the edge of a cliff" and predicted that both bitcoin and ether would fall further.

“Both bitcoin and ethereum will bottom out before the Fed takes action and turns its policy from tight to loose,” he said in a blog post.

Source:Interface News

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