Bitcoin’s value plunges 9% as Federal Reserve and RBA hike interest rates
The Fed’s 0.5% interest rate hike has resulted in markets across the board — including stocks and crypto — facing major liquidations.
- BTC’s 12-month profit/loss ratio currently stands at -36.5%.
- The Luna Foundation Guard (LFG), crypto project Terra Luna’s non-profit wing, recently added $1.5 billion worth of BTC to its balance sheets.
- Experts believe that Bitcoin could face a lot of financial turbulence throughout May.
Bitcoin (BTC) is currently experiencing a major financial onslaught, one that has seen the flagship digital asset’s value slip by 9% over the last 24 hours alone. As a result, BTC is now down 20% for the past month while trading at $35,852.
The ongoing price descent comes when the global economy seems to be in a state of complete disarray, thanks in large part to the Federal Reserve. The Fed hiked interest rates by a sizable 0.5%, its largest such move since the turn of the millennium. As a result, BTC dipped as low as $35,655 on May 6 while the Dow Jones lost approximately 1,050 points.
As per some analysts, Bitcoin will have to close in on the $37,500 mark to forge a real comeback in the near term. If achieved, it might see the currency retest the $39,000 resistance subsequently.
However, many pundits also believe that the coming few weeks could see BTC facing an extremely high degree of volatility. This requires the digital currency to stay above the $38,400 zone to stand any chance of a 180-degree price reversal.
At press time, the total market capitalization of the digital asset sector stands at $1.7 trillion. Bitcoin’s market dominance share is at a respectable 41.5%.
Luna Foundation Guard adds 37,863 BTC to its coffers
Singapore-based non-profit Luna Foundation Guard, which is closely associated with popular crypto project Terra Luna, has added another $1.5 billion worth of Bitcoin to its crypto reserves. Reports suggest that the LFG accrued a total of 37,863 BTC via a series of over-the-counter (OTC) swaps with crypto broker Genesis and a purchase facilitated by venture capitalist Three Arrows Capital.
LFG now possesses an estimated $3.5 billion worth of BTC, putting it among the top 10 holders in the world.
Lastly, with these purchases, the foundation has inched a step closer to its eventual vision of collecting $10 billion of Bitcoin to back up its algorithmic stablecoin US Terra (UST), which has recently emerged as one of the most popular stablecoins on the market. UST is trailing only Tether (USDT) and USD Coin (USDC) in total capitalization and circulating supply.
Interested in cryptocurrency? Learn more about the basics with our beginner’s guide to Bitcoin, dive deeper by learning about Ethereum and see what blockchain can do with our simple guide to DeFi.
Disclosure: The author owns a range of cryptocurrencies at the time of writing.
