Today, the price of Bitcoin fell below $62,500, marking one of the worst weekly declines of the year for the entire cryptocurrency market.
The leading cryptocurrency is now trading near its monthly low at approximately $62,490, driven by a six-day streak of outflows from US Bitcoin ETFs and uncertainties surrounding monetary policies. Over the past week, Bitcoin’s value has decreased by 6%.
Ethereum, the second-largest cryptocurrency, also saw a decline of over 6% in the same period. Earlier this month, ETH was trading close to $4,000, but it has since dropped to $3,360, according to Coingecko data.
Federal Reserve to Cut Rates Only Once This Year
Earlier this month, the Federal Reserve maintained its benchmark interest rate and hinted at only one rate cut this year, down from the three cuts initially projected. While the Fed noted some signs of inflation cooling, it has yet to reach its annual target of 2%.
High-interest rates tend to negatively impact cryptocurrencies, as the attractiveness of speculative, risk-driven assets like crypto diminishes in such environments.
Major Altcoins See Deepening Correction
The total cryptocurrency market value has dropped to $2.39 trillion, a 3.5% correction in just the past 24 hours. Leading altcoins such as BNB, Solana, and XRP have decreased by 6.6%, 16%, and 4% respectively over the past seven days.
Telegram’s TON, which recently saw significant gains, has also fallen nearly 13% from its all-time high of $8.25 recorded earlier this month.
Popular meme coins Dogecoin, Shiba Inu, and PEPE have declined by 5%, 6%, and 11% respectively in the last 24 hours. Dogewhatever suffered the most, losing almost half of its gains from the previous week.
The Last Support for Bitcoin
We should not exaggerate the situation. Since the beginning of the year, Bitcoin has performed remarkably well. Staying above $60,000 for such an extended period is a significant achievement, something that was rare even in 2021.
Bitcoin has undoubtedly grown. The macroeconomic landscape is now challenging financial markets, with U.S. inflation in Q1 2024 being significantly higher than expected.
As a result, expectations for interest rate cuts this year have diminished. At the beginning of the year, there were projections for six rate cuts by the Federal Reserve, but this has now been reduced to just one or two. This substantial change has understandably paused the bull market.
Why This Drop Is a Good Buying Opportunity
Despite the recent downturn, this correction presents a strategic buying opportunity for investors. Bitcoin's resilience in maintaining levels above $60,000 showcases its strength and potential for future growth. With inflation cooling and interest rate cuts on the horizon, market conditions could soon become more favorable. Investors who buy during these dips often benefit from significant gains when the market rebounds. Therefore, for those with a long-term perspective, this could be an ideal moment to accumulate more Bitcoin.
