Last week's market crash on fears that further interest rate hikes won't be enough to keep inflation at bay dragged bitcoin's price on Monday, May 9, to an annual low below $ 33.000.
The decline is continuous
At the time of writing, the price of bitcoin has dropped to one quotation $ 33.005 since the start of 2022, a decline of 28,8% year-over-year. The drop from its all-time high of November 10 of last year is now 52%, breaking the trend that the price of bitcoin had maintained until now of a succession of rising lows or rising price plans.
Another consequence of the continuation of the downward trend in the price of bitcoin was recorded on Sunday 8, when it closed the sixth consecutive week in red, a behavior that had not occurred since September 2014. It had already reported last Friday 6 the repetition of the five consecutive week negative pattern of declining BTC price, which materialized on Sunday May 1st.
Is the Federal Reserve the cause of this decline?
As can be seen in most of the charts we find online, bitcoin recorded a new annual low on Monday, while the Nasdaq and S&P 500 indices also show year-to-date highs. The S&P 500 is down 15,32% since January 1, while the tech stocks on the Nasdaq index are down 24,52%.
As we previously reported, even though the US Federal Reserve announced Wednesday March 4th that it will maintain the limits on interest rate hikes this year, the market expects there may be higher hikes. The recent increase on March 4th was 50 points, or 0,5%, although those forecast for next June could be 0,75%. The rise in rates makes credit more expensive and seeks to reduce consumption, with which the Fed believes it can contain inflation.