Altcoins

Are Altcoins Prone For Massive Correction This Week Amid Interest Rate Hikes

Written by: Nidhi Kolhapur

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Nidhi Kolhapur

Nidhi is a Certified Digital Marketing Executive and Passionate crypto Journalist covering the world of alternative currencies. She shares the latest and trending news on Cryptocurrency and Blockchain.

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May 2, 2022

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Bitcoin has dropped to its lowest price point since early March, causing the crypto market valuation to drop by $130 billion in two days. Bitcoin is still struggling to break through the $40,000 barrier, having failed to do so over the weekend.

The most valuable cryptocurrency by market capitalization had plunged to a near two-month low of slightly over $37,000. Solana, Cardano, Terra, Polkadot, and a slew of other cryptocurrencies are all in the red, with significant price drops.

Also Read : How Will Crypto-Market React To the Next FOMC Meeting Held On May 3rd & 4th?

Is it the Right Time to Invest?

After raising rates for the first time since March 2018, the Federal Reserve is expected to boost rates again in May. According to the CME FedWatch Tool, the nation’s central bank is now predicted to raise the benchmark Fed funds rate by 0.5 percent.

At the time of publication, the cryptocurrency market had experienced a 2.5 percent correction. In the graph below, Santiment depicted a scenario that supported the bearish views.

To begin with, Bitcoin, the most popular cryptocurrency, experienced a significant setback, as shown in the graph above. But that isn’t the case. Bitcoin began sliding ahead of the S&P 500 index ahead of interest rate hike discussions, despite its “offsetting inflation claims.”

Moving on to altcoins, these alternative digital assets were trading with negative views all over. The largest altcoin, Ethereum, experienced a 3% correction, falling to $2.7k. But it got worse because Wu Blockchain, a well-known news outlet, condemned it.

This action had been foreseen by a number of analysts. Benjamin Cowen, a top analyst, issued a ‘Crypto Alert.’ He believes that investing in altcoins is still dangerous due to Bitcoin’s (BTC) previous performance. In the previous round of interest rate hikes, BitMEX creator Arthur Hayes predicted that cryptocurrencies would decline by 75 percent to 90 percent.

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Nidhi Kolhapur

Nidhi is a Certified Digital Marketing Executive and Passionate crypto Journalist covering the world of alternative currencies. She shares the latest and trending news on Cryptocurrency and Blockchain.

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