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Following a shocking week, bitcoin prices continue to fall below $60,000.
As this is written, Bitcoin is having a hard time recovering from an April decline reminiscent of November 2022 and reclaiming the $60,000 mark at the beginning of May. The idea that Bitcoin could serve as "digital gold" has taken another hit in the past week's price decline, as analysts have pointed out that Bitcoin is more correlated with conventional markets than it is with Gold.
The Nasdaq plummeted 2% and the S&P 500 fell 1.6% on the day due to the Federal Reserve's 'higher for longer' monetary policy forecast, which was announced on May day. Despite prolonged tight monetary conditions, the US economy is nevertheless solid. Zach Pandl, head of research at Grayscale Investments, claims that if interest rates stay high for a longer period of time, it will keep the dollar strong and discourage investments in assets like Bitcoin.
A halving event that happened during Bitcoin's last peak yet didn't bother miners and, looking back, seems to have been factored in didn't help matters either. Big money washed out of US Bitcoin ETFs last week, and Hong Kong's lackluster reaction to the much-publicized debut of spot-Bitcoin ETFs was the icing on the cake.
Despite the spot-Bitcoin ETFs' bad first day performance, analysts are optimistic that they would gain popularity among Chinese investors. After raising more than $123 million in assets during its initial trading session, ChinaAMC's Bitcoin product is already one of the top twenty percent biggest exchange-traded funds (ETFs), according to Bloomberg's senior ETF analyst Eric Balchunas.
Bitcoin is still in buy area on the weekly chart, which means that some purchasers may take advantage of the bargain to buy, even if April was a down month. The lower $50,000 region could be a potential taker if the slide continues, but if prices continue to decline, fresh selloffs could bring prices towards the $42,000 support level.
