The cryptocurrency market is in a major slump after investors sold their assets out of panic over the US stock market and the Fed’s interest rate policy. The price of bitcoin (BTC) fell from $39,500 to $35,500 in just 6 hours. This decrease immediately ensured that the increase up to 5 May was canceled out. This decrease also meant that many people became concerned.
Interest Policy FED is holding back a BTC rise.
On May 4, after Fed Chairman Jerome Powell indicated that it is unlikely to hike rates above 75 basis points, BTC almost instantly shot to $40,000 for a short period. Still, Powell said a 50 basis point hike would be discussed at future meetings to refocus on lowering inflation to 2%. However, due to the Fed’s aggressive expectations and macroeconomic conditions, BTC could even plunge back to $32,900, its lowest point since January 24.
Positive Correlation Between Stocks and BTC
The stock market also saw significant reds on May 5 in response to the Fed’s announcement. While the Dow fell 1,120 points, or 3.3%, the S&P 500 fell 3.7%. The Nasdaq fell 5.2%. This is the sharpest decline since 2020. These declines clearly indicate that the stock market has significant influence on the Fed’s decisions. Higher interest rates can make technology stocks less attractive as it can reduce the value of investors’ future earnings. Bonds with a higher interest rate or other safe investments, such as gold, are becoming increasingly attractive against assets such as stocks and cryptocurrencies.
CryptoQuant’s statistics show that the S&P500 and BTC are moving roughly evenly and their positive correlation has reached a new peak in 2022, meaning that the stock market sell-off could also affect the BTC price.
Technical analysis
On the daily chart, we can see BTC breaking below a strong support line at $37,000 that has been formed since January. BTC is currently trading at the lower end of the Bollinger Bands. It also doesn’t look like BTC will make an upward correction anytime soon. We also see that the BTC price has fallen below the 23.6% fib retracement level, the MACD has fallen below zero and the RSI has also fallen below 50. All technical indicators predict bad weather. In the short term, therefore, BTC may continue to fall further down, even towards the January bottom which is at $32,900.
How do I survive a BTC bear market?
Despite the falling price, there are traders who have managed to make more than 1000% profit. But how did they do this? To answer that, we first need to look at one of the most popular ways to invest, which is crypto futures trading with 100x leverage. In a bear market, traders can use this leverage to maximize their profits. Bexplus is a bitcoin-based futures exchange offering BTC, ETH, ADA, DOGE and XRP perpetual futures contracts with 100x leverage. A trader can make money when the price rises, but also when it falls.
For example, you can open a short position, betting on a price drop, of 1 BTC when the price is at $36,500 with a leverage of 100x. When the price of bitcoin falls to $33,000, the investor makes a profit. The profit is then ($36,500 – $33,000) * 100 BTC/$33,000 *100% ≈ 10.6 BTC, giving an ROI of 1060%.
Sign up with Bexplus and profits from top traders
Bexplus is a secure platform, accredited by the US FinCEN MSBA (Money Services Business). The functionalities below ensure that Bexplus is a wonderful platform within the cryptocurrency market.
When you deposit BTC into your Bexplus account you can use a 100% BTC bonus† This bonus can also be used to trade futures contracts. That means if you deposit 1 BTC, you will get 2 BTC in your account. The more you deposit, the more bonus you get. You can get a maximum of 10 BTC bonus.
Bexplus offers the unique copy trading option for novice traders to become a true veteran. Users can choose to follow top traders who have proven to make a lot of money in the market. The user still has the option to take profit or set a stop loss if they want to.
21% interest on your BTC Wallet
Bexplus helps users make a profit by simply owning BTC. In the BTC wallet you get up to 21% interest per year without any additional risk
Other Bexplus benefits:
- Demo account with 10 BTC to practice with without risk.
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Bexplus is a good trading platform and can be used by both beginners and experienced traders. Click here to create an account on Bexplus and claim the bonus of up to 10 BTC.
The above article is a submitted piece and is not the responsibility of Crypto Insiders. This is not financial advice.