The crypto market faced a sharp decline, losing a significant portion of its value amid economic challenges and inflation.
Crypto Market Plunge
On Friday, the crypto market wiped out nearly all its gains from earlier this week, losing $115 billion in value. Bitcoin, which was close to $88,000, plunged to $83,800, marking a 3.8% decline in just 24 hours. Major altcoins like Avalanche (AVAX), Polygon (POL), Near (NEAR), and Uniswap (UNI) saw losses of up to 10%.
Impact of U.S. Economic Woes
The downturn was not limited to digital assets; the U.S. stock markets also saw a sharp decline following weak economic data. The S&P 500 fell by 2%, and the Nasdaq dropped by 2.8%. Crypto-related stocks like MicroStrategy and Coinbase decreased by 10% and 7.7% respectively. February's inflation report showed a 2.5% year-over-year rise, with consumer spending showing weak growth, contributing to economic uncertainty.
Forecasts and Expectations
Bitcoin's drop to $84,000 was anticipated due to the CME futures gap. Despite the current correction, some experts see long-term positives for a recovery. Joel Kruger noted the growing crypto adoption and involvement of major financial institutions. However, further short-term declines are possible as analysts warn of losing momentum.
The crypto market remains under pressure from economic factors and inflation, yet experts don't rule out the possibility of recovery in the near future.
