Bitcoin and most altcoins continue to show a sharp decline in prices amidst market instability and recession fears.
Sharp Price Decline of Bitcoin and Altcoins
Bitcoin dropped to $74,428 on April 7, its lowest level since November 6, marking a decline of over 31% from this year's peak. Altcoins fared even worse, with many investors exiting their positions. Ethereum fell below $1,500, reaching its lowest level since 2023.
Reasons for Market Decline
The ongoing decline in the cryptocurrency market mirrors the performance of the stock market, with the Dow Jones, Nasdaq 100, and S&P 500 each falling by over 5%. This downturn was prompted by Donald Trump's insistence on continuing tariffs on goods, coupled with deteriorating economic conditions that led analysts, including those from Goldman Sachs, to raise recession odds.
Potential Price Recovery
There are two main reasons for a possible rebound in cryptocurrency and stock prices. First, Trump has expressed openness to negotiations with other countries. Second, there is an expectation that the Federal Reserve may intervene as it has in past crises. A Bloomberg analyst noted, "The Federal Reserve may soon not have a choice but to cut rates if economic growth faces severe threats."
The price decline of Bitcoin and altcoins is mainly driven by economic issues and negative stock market news. However, with active negotiations and potential Federal Reserve responses, the cryptocurrency market may recover.
