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Bitcoin price drops fuelling over $400 market liquidation

Florence Muchai

Time waits for no man, neither for crypto recovery. So it is no surprise that the crypto market resurgence has met with resistance. The market is in decline, and investors are worried that another crypto winter may be on the way.

The cryptocurrency market has once again traded red, with the majority of crypto currencies declining in value. On the other hand, Bitcoin was increasing in value over the previous day, when it hit $39,000.

Bitcoin price drops as extreme fear sweeps the crypto market

At the time of writing, the price of Bitcoin has dropped below $36,000, losing another 2%, to $35,780. However, the global cryptocurrency market cap is currently at $1.67 trillion, which is down by roughly 7.30% over the past day.

On 5 May 2022, the cryptocurrency market held up well during the day, only to fall by as much as 8% at nightfall due to a global interest rate hike in response to rising prices announced earlier. The crash occurred roughly one month after BTC hit an all-time recovery high of $39,500.

The broad stock market plummeted even more yesterday, such as the Nasdaq 100 and S&P 500. The steep price decline is the worst daily drop since January 2022. Furthermore, the Fear and Greed Index for Bitcoin is at 22, which indicates “extreme fear,” indicating that investors are terrified and may provide a buying opportunity.

On 5 May 2022, Peter Schiff, a prominent Bitcoin detractor, wrote that investors would need cash to pay rising household expenses and predicted that they would continue selling their cryptocurrencies. He compared the plummeting prices of Bitcoin and crypto-related stocks to a bubble, noting that when it inevitably bursts, the entire industry will get revealed as “malinvestment.”