Are Altcoins Prone For Massive Correction This Week Amid Interest Rate Hikes
Right now•3 min read•Altcoins
Bitcoin has dropped to its lowest price point since early March, causing the crypto market valuation to drop by $130 billion in two days. Bitcoin is still struggling to break through the $40,000 barrier, having failed to do so over the weekend.
The most valuable cryptocurrency by market capitalization had plunged to a near two-month low of slightly over $37,000. Solana, Cardano, Terra, Polkadot, and a slew of other cryptocurrencies are all in the red, with significant price drops.
Is it the Right Time to Invest?
After raising rates for the first time since March 2018, the Federal Reserve is expected to boost rates again in May. According to the CME FedWatch Tool, the nation’s central bank is now predicted to raise the benchmark Fed funds rate by 0.5 percent.
At the time of publication, the cryptocurrency market had experienced a 2.5 percent correction. In the graph below, Santiment depicted a scenario that supported the bearish views.
#Crypto markets have retraced significantly this weekend, particularly #altcoin prices. If you have been waiting for major price volatility, expect for it to continue into Monday & Tuesday as the #Fed approaches their May interest rate hike decision. — Santiment (@santimentfeed) April 30, 2022
To begin with, Bitcoin, the most popular cryptocurrency, experienced a significant setback, as shown in the graph above. But that isn’t the case. Bitcoin began sliding ahead of the S&P 500 index ahead of interest rate hike discussions, despite its “offsetting inflation claims.”
Moving on to altcoins, these alternative digital assets were trading with negative views all over. The largest altcoin, Ethereum, experienced a 3% correction, falling to $2.7k. But it got worse because Wu Blockchain, a well-known news outlet, condemned it.
Altcoins fell sharply in the last 24 hours, FTM fell by 19%, game (AXS GALA SAND MANA ENJ) and storage sector (FIL HNT ICP) fell by more than 12%. Previously, BitMEX founder Arthur Hayes said that altcoins could fall by 75% to 90% in this round of interest rate hikes.— Wu Blockchain (@WuBlockchain) April 30, 2022
This action had been foreseen by a number of analysts. Benjamin Cowen, a top analyst, issued a ‘Crypto Alert.’ He believes that investing in altcoins is still dangerous due to Bitcoin’s (BTC) previous performance. In the previous round of interest rate hikes, BitMEX creator Arthur Hayes predicted that cryptocurrencies would decline by 75 percent to 90 percent.
