During the past week, the cryptocurrency market has been flooded with panic after a stock sell-off hit the U.S. last week, sending the cryptocurrency market into a frenzy and causing bitcoin to plunge by roughly 10%.
According to Coin Metrics, bitcoin, the world’s largest digital currency based on market value, was down more than 3% at $34,582.36, including fees, on Sunday. In recent months, Bitcoin has been trading in a narrow range of prices as it looks to reclaim the highs it reached at the end of last year.
Unlike in November 2021, when the price of the cryptocurrency peaked at $67,802.30, it is now down 50% from this level.
A week after losing 1,000 points on Thursday, blue-chip Dow Jones Industrial Average dipped 5%, and the Nasdaq Composite dropped to its lowest level in more than two years. This marks one of the largest single-day losses since February of this year. Nasdaq and Dow also fell, making it one of the worst days of the year.
Additionally, the Federal Reserve raised it benchmark interest rate by half a percentage point on Wednesday because it is responding to inflation pressures causing interest rates to rise.
A large rate hike of 75 basis points is not being considered by Fed chairman Jerome Powell, leading the stock market to rally. Investors erased most of the gains made by the Fed rally by Thursday.
According to CoinGecko.com, the market cap of all cryptocurrencies in the world stood on Sunday at $1.68 trillion, with cryptocurrency volume traded in the last 24 hours at $119 billion.