Bitcoin is leading the way down for all crypto as macro indicators may spell disaster for the market in the short term, according to some analysts.
Bitcoin (BTC) has dumped 7.5% in the past 12 hours, plunging to six-month lows from $43,328 at 4 pm UTC on Thursday to $38,258 by 4 am UTC on Friday.
At the time of writing, Bitcoin was trading at $39.096.
The price crash has so far wiped about $50 billion from the overall crypto market. The total crypto market capitalization has been on a slow decline since early November 2021 when it reached a peak of $3 trillion.
Without a single bombshell piece of news that many could blame the dump on, investors are wondering what caused the price action. Some pointed to macro indicators, with tech stocks on Nasdaq entering into “correction territory” and several interest rate hikes are expected to come in 2022.
But Bitcoin moves in mysterious ways. It could just as easily be the news that Bitcoin bull Raoul Pal has apparently sold all his Bitcoin and only has 1 BTC left…
The Rekt Capital Twitter account noted that the current pattern playing out “shares a few similarities with the price behaviour of late September 2021.” At that time, Bitcoin tumbled several times from about $52,000 down to about $41,300 from September to October. It proceeded to rise up to $69,000 by early November.
The InvesetAnswers Twitter account, which has over 85,000 followers, suggested that bears “need Bitcoin under $41,000 to pocket $132 million in gains.”
BTC is not the only crypto to plunge on Friday. Ether (ETH), Binance Coin (BNB), Solana (SOL), Cardano (ADA) and XRP have all experienced severe corrections between -6.3% and -10% in the past 12 hours.
Among the top 10 coins by market capitalization, ADA experienced the biggest overall losses as it dropped 10% to $1.21. Friday’s buggy launch of SundaeSwap did not appear to help matters.
Forbes contributor Billy Bambrough suggested in an article on Friday that investors have been rattled by recent announcements from the United States Federal Reserve that it would shrink its balance sheet and raise interest rates.