At the auction on Monday, the value of the main digital asset has dipped by almost 10% since Friday, dropping to the summer lows of 2021, and closed the session near the $31,000 mark.
Over the past five days, the price of bitcoin has dropped by 22%.
At the time of writing, the main virtual asset is balanced at $31,900.
The leading altcoins also readily adopted the negative dynamics of BTC. So, over the past 24 hours, the cost of Ethereum has decreased by 13% - to $ 2,349, the XRP coin has lost 12.2%, and the cost of Terra has collapsed by 25.3%.
According to the world's largest virtual asset data aggregator CoinGecko, over the past 24 hours, the total capitalization of the crypto market has dropped to $1.46 trillion. At the same time, the cryptocurrency indicator of fear and greed over the past 24 hours has decreased by 1 point to 10 points.
The permanent decline in the digital asset market continues against the background of the fall in the US stock exchanges, which began last week.
The main reason for the collapse of the stock market on the eve was the US Federal Reserve's increase of the key federal funds rate by 50 basis points in the fight against ever-increasing inflation. Now the rate range is 0.75-1% per annum.
Earlier in March, the US central bank raised the rate by 25 basis points. The last time the central bank raised the rate following the results of two consecutive meetings back in 2006. At the same time, there has not been an increase in the indicator by 50 basis points at the same time since 2000.
Another significant downward factor for the value of leading cryptocurrencies was the transition of leadership from private investors, who dominated the market for many years, to institutional ones (hedge and investment funds).
The transformation of the digital asset market under the influence of large professional investors leads to its close correlation with traditional global markets. Thus, most institutional investors consider cryptocurrency to be the same risky asset as the securities of technology companies.
By the way, last month the high-tech indicator NASDAQ Composite lost more than 12%, which was the highest level of decline since 2008. At the same time, since the beginning of 2022, this stock indicator has already fallen by 25%.
Earlier, experts from the investment company Arcane Research have already stated that the correlation of BTC and technology securities has reached a high since July 2020.
As for the predictions of cryptanalysts regarding the near future of the main virtual asset, most of them confidently declare the promising prospects for the coin.
The day before, experts from the Bloomberg news agency predicted the resumption of growth of the main virtual coin. Thus, analysts are confident that the rapid correction in global stock markets will force the Fed to slow down the pace of tightening monetary policy. In response to this, a tangible bullish rally will begin in the markets for high-risk assets, including cryptocurrency. In addition to a significant increase in the cost of Bitcoin, Bloomberg also allows the resumption of growth in popular virtual assets Ethereum and Solana.
Earlier, American economist Benjamin Cowen said that the digital asset market is expecting spectacular growth in the near future. Interestingly, this time in his forecast, the crypto expert ignored the king of the cryptocurrency market and advised traders to invest in Cardano, Avalanche and Polkadot altcoins.
May is traditionally considered a good enough period for bitcoin. So, over the past 11 years, digital gold has ended this month with an increase in seven cases and a fall in four. The average May rise is about 27%, and the decline is 6%. If this May the first cryptocurrency decides to repeat the approximate dynamics of past years, it may rise to $48,000 in a month or collapse to $32,000.Recall that in April the cost of military-technical cooperation sank by 16.2% - the minimum figure for this month since 2011 against the backdrop of negative events in world markets, as well as the conflict between Russia and Ukraine.
According to the results of the first quarter of 2022, the cost of digital gold lost 1.5%. At the same time, the past March was a rather favorable period for the asset, as a result of which it reported an increase of 10%, having strengthened for the second consecutive month.
In January, bitcoin lost more than 16%, and during February its price rose by 12%.
In November 2021, the BTC updated its historical record, soaring above $69,000. Since then, the cryptocurrency has gone into a steady decline and has already lost more than 50% of its highest value to date.
At the end of the past year, the price of bitcoin increased 1.6 times to $46,200 from $28,900.
