The main cause of the fall in crypto-linked stocks is being attributed to Bitcoin dropping below $29K. Monday morning’s drop in Bitcoin (BTC-USD) trading below $29K proves that investors are not very confident in this digital token. The reason for this fall is also due to investors’ attention being focused on the Federal Reserve’s meeting, where there is hope of increasing rates for the Federal Open Market Committee.
Along with Bitcoin’s drop, other major digital tokens are also falling victim to this downturn. After BTC-USD, other major tokens like Ethereum (ETH-USD) and Solana (SOL-USD) have also dropped. At this time, BTC-USD has dropped 3.3% to $28.45K at 10:43 am, once again excluding the major technical level of $30K. Ethereum has also dropped 3.6% to $1.84K, while Solana has dropped 5.5%.
The main reason for the decline in crypto-related stocks was due to a market downturn. In this context, Riot Blockchain (NASDAQ: RIOT) fell by 5.9%, Marathon Digital (NASDAQ: MARA) by 5.5%, Cleanspark (NASDAQ: CLSK) by 5.5%, Core Scientific (OTCPK: CORZQ) by 5.2%, Microstrategy (NASDAQ: MSTR) by 4.1%, and Coinbase Global (NASDAQ: COIN) by 1.8%.
Regarding investor readiness for Wednesday’s FOMC meeting, according to the CME FedWatch Tool, stability is being shown in the core currency fluctuations and the labor market is still strong. With regard to Fed Fund Futures prices, there is a 91.2% chance that monetary policy makers will increase the benchmark rate by 25 basis points, which will reach the target range of 5.0%-5.25%.
Bankrate’s chief financial analyst Greg McBride has argued that the final rate could increase, “or it could be final for a while, as the Fed considers whether it is appropriate to assess the impact of inflation, economic conditions, and all savings.” There could be an increase in rates.
“He suggests that the labor market’s continuous strength and pressure from inflation make it appropriate for the Fed to highlight the issue of raising interest rates again on May 3,” he said. “The Fed has raised a credible issue about inflation and needs to find a way to address it, which can help stabilize prices.”