Bitcoin (COIN: $BTC) and other major cryptocurrencies suffered a major decline on Friday, affecting most of the crypto market.Â
Bitcoin declined by almost 5% within 12 hours on Friday, while Ethereum, the second largest cryptocurrency, also faced a significant decline of 8.42% in the past 24 hours on the same day.
Several factors are driving this downtrend in the market, including the Federal Reserve rates, inflation data, and more. Let’s discuss these.
Interest Rates and Geopolitical Tensions
The higher interest rates, persistently high inflation, and Federal Reserve response are the true drive for this market trend. Moreover, Investors are expressing doubts about the Federal Reserve’s capacity to control inflation, which is causing interest rates to rise and reducing market liquidity. This situation poses particular difficulties for assets seen as more speculative, such as Bitcoin.
Last month, JP Morgan said that in March, the Bitcoin rally could be postponed by the Federal Rates cuts. Fed officials have also stated that they could hold off interest rate cuts, after disappointing economic data, which could drive more inflation and stimulate a flight from risky assets.
Furthermore, geopolitical tensions, such as the looming Israel-Iran conflict and China’s economic decline, are also some of the reasons for the jitters in the crypto market.
Crypto Market Price Update
Bitcoin was trading at $66,992.19 late on Friday, with a market cap of $1.32 trillion and a 24-hour volume of $44.22 billion. It has a strong resistance at $71,360., and the $64,666.69 level is a round number that could act as psychological support. There is also a previous low around this price level. As of Saturday morning in New York, BTC had experienced a slight increase of 0.44% to $67,532.90.
Likewise, Ethereum was trading at $3,263.48, down by 7.12%, with a market cap of $300B and a $25B 24-hour trading volume, an 87.17% increase. It has a strong resistance at $4092.52 and support at $3093.
Solana ($SOL) tested its support level of $140 and is down by 11.89% in the past 24 hours with a market cap of $67 billion after recently breaking through its $162.28 support level. The price trend has become bearish for $SOL as Bitcoin continues to dump.
Other major cryptocurrencies such as XRP, FIL, and DOGE faced a significant slump due to the Bitcoin bearish trend. XRP fell 10.61%, whereas FIL and DOGE declined 17.95% and 14.29%, respectively.
Should You Invest in Crypto Now?
Bitcoin is likely experiencing a market correction and has had problems breaking through the 71K mark, which it has tested thrice. However, it is expected to move higher after the halving on April 19, which will likely cause other altcoins to surge. With experts predicting that the price of BTC could rise above $80K after the halving, this could potentially be a great time to grow your crypto portfolio.Â
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