The cryptocurrency and stock market witnessed a severe crash yesterday after an initial false breakout over the Fed’s news of interest rate hikes.
A false breakout occurred in the market to trap the bulls on Wednesday after Powell’s speech that the current interest rate hikes will be at 50 basis points and never 75-bps as investors expected. Bitcoin broke out of its three-week resistance at 40K along with other crypto-assets such as Ethereum, Cardano, and Dogecoin.
This false breakout which occurred earlier on Wednesday forced many buyers to jump in, betting on higher gains in the long term, only for the worse to happen yesterday in the market. The bulls have been trapped as the crypto and stock markets crashed hard again.
Bitcoin prices witnessed a severe crash yesterday, losing over 9% of its value in a single day, with the price falling to a new all-time-low at $35,571 for the first time in 2022. Other cryptocurrencies were not left out. Ethereum fell to a new all-time-low at $2685, Cardano was pushed down 0.7716, Dogecoin fell to 0.1250, and Polkadot to 14.05.
The clampdown was not in any way limited to cryptocurrency alone. The stock market was affected too. Major US stocks lost significant value in the market yesterday.
Apple fell by 5.57%, Tesla lost 8.33%, Netflix lost 7.69%, Amazon fell by 7.56%, and Facebook fell by 6.77%.
Also, indexes like S&P 500 lost 3.56%, US100 lost 5.06%, and Dow Jones fell by 3.2%.
The clampdown also extended to commodities like gold and silver. Gold prices lost 5.66% of its value after crossing 1900 yesterday, and later on fell to 1854. Silver slipped to 22.260 losing 1.2% of its market price.
The bear flag has been identified in the market, especially on Bitcoin, causing investors to panic if this would be the bottom of the fall or just the beginning of a more significant fall. The weekly close today will further determine the direction we are to expect in the market.
