Bitcoin Plunges Below $30,000 Amid Economic Concerns

On Monday, cryptocurrency prices experienced a decline as investors shifted their focus to upcoming bank earnings and recession concerns, leaving behind the excitement around Ethereum’s “Shapella” upgrade.

According to CoinMetrics, Bitcoin dropped over 3.5% to $29,251, falling below the crucial $30,000 level that it had achieved last week for the first time since June. In contrast, Ether decreased by 2.4%, but it managed to maintain its $2,000 mark, which it had surpassed the previous week.

Last week was a good one for cryptocurrencies, with prices rising due to optimism surrounding Ethereum’s latest technical upgrade, which is expected to bring greater liquidity to the network by enabling “locked up” Ether to be withdrawn. This is anticipated to attract more institutional interest in the long run, with Bitcoin and Ether rising 8% and 12%, respectively, for the week.

According to Yuya Hasegawa, a crypto market analyst at the Japanese bitcoin exchange Bitbank, a small correction in prices is expected this week, and some investors may want to take profits from the previous week, causing some selling pressure. However, macro factors are not expected to have a significant impact on the price of Bitcoin, as the Fed Funds futures market has already priced in more than an 80% chance of a 25 bp hike in May.

Crypto investors are keeping an eye on bank earnings this week for more insight into the health of the sector and the possibility of an upcoming recession.

Several other Fed officials are also scheduled to speak this week. Callie Cox, an analyst at investing company eToro, believes that it is uncertain how cryptocurrencies will perform during a recession since they have not yet performed well in a high-rate, slow-growth environment.

Despite the potential downside this week, Hasegawa believes that it should not severely affect Bitcoin’s upward trend.

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