Cryptocurrencies faced a sharp decline of nearly 10% in just a few hours, leading to a sea of red in the entire market. Bitcoin, the largest cryptocurrency by market capitalization, plummeted to around $57,000 USD, losing over 20% of its value compared to its all-time high of $73,000 in mid-March. The decline was attributed to lack of attention towards spot ETFs in Hong Kong and investor concerns about interest rates.
During the same period, other cryptocurrencies like Ethereum (ETH) and Solana (SOL) witnessed 9-11% declines. Currencies with several hundred million USD in market capitalization lost between 15-25% in just a matter of hours. Futures trading positions worth nearly $100 million were liquidated on exchanges in the past hour, totaling close to $500 million in liquidations over a 24-hour period.
The decline in cryptocurrencies was accompanied by traditional markets as the Nasdaq index fell 2% and the S&P 500 lost 1.6% on the same day. Experts attributed the downward trend to expectations for higher interest rates by the US Federal Reserve due to persistent inflation, which is also leading to a stronger position for the USD.
Bitcoin and overall cryptocurrency market are now on track for their worst monthly decline since November 2022. In April alone, Bitcoin lost nearly 18% of its value while Ethereum dropped around 19%. Altcoins such as SOL, Dogecoin (Doge), and AVAX are facing even deeper corrections of 35-40% this month. The total cryptocurrency market capitalization has decreased by almost 20% since its peak in March, marking the largest decline in cryptocurrency capitalization since June