(Source = Reuters Union)
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Was it a ‘one-day relief rally’?

(Source = Reuters Union)

On May 6th, the price of Bitcoin fell to $36,000. The day before, it broke through the $39,000 mark, raising expectations for a $40,000 re-entry, but it returned all the increase in one day and was in vain.

According to CoinMarketCap, a cryptocurrency market tracking site, as of 12:00 am on May 6th, Bitcoin is trading at $36,467.20, down 8.11% from 24 hours ago. At 4:24 a.m. that day, it momentarily increased the drop to $35,871.76. Ethereum, the second-largest cryptocurrency by market capitalization, also fell by more than 6% from 24 hours ago, rising and falling at $2,750.

“Bitcoin fell the most in almost a month as optimism in financial markets faded after the Federal Reserve’s Federal Open Market Committee (FOMC) meeting,” Bloomberg News reported on the 5th (local time). ” reported.

Until the previous day, Bitcoin was on the verge of breaking through the $40,000 mark, up nearly 6% after positively accepting Fed Chairman Jerome Powell’s remarks. This is because, after the Fed announced that it would raise the benchmark interest rate by 0.5 percentage points in a statement, Fed Chairman Powell drew a line on the question of whether there is a possibility of a 0.75 percentage point rate hike in the future, saying, “It is not something we are actively considering.” . In response, experts analyzed that the ‘investment relief rally’ continued, leading to an increase in prices, as Powell’s remarks were made at the previous IMF meeting, etc.

However, the interest rate on US Treasury bonds has emerged as a variable. As Powell’s remarks were reflected a day late and soared, the three major New York stock indexes plummeted differently from the previous day, and Bitcoin also fell. Treasury bond yields are also commonly referred to as government bond yields, but when the interest rate on government bonds, which is safer than the stock market, rises, investors do not feel the need to take risks and invest in stocks, which is a bad news for the stock market.

The 10-year U.S. Treasury yield rose by more than 16 basis points (1 bp = 0.01 percentage point) during the day to 3.10% a year, the highest since 2018, while the Dow plunged 3.125, the S&P 500 fell 3.56%, and the Nasdaq fell 4.99%. Recently, the tendency of Bitcoin to follow the rise and fall of the Nasdaq Index has increased, and the sharp decline in the Nasdaq also affected the price of Bitcoin.

“Yesterday’s cryptocurrency and stock market rally was a one-day relief rally,” said Mike McGlon, an investment strategist at Bloomberg Intelligence, a market data research and analysis company affiliated with Bloomberg.

On this day, the ‘Crypto Fear and Greed Index’ estimated by ‘Alternative’, a cryptocurrency data provider, was 22 points. It fell 5 points from the 27 points the previous day and entered the stage of ‘extreme fear’. The index closer to 0 indicates extreme fear in the market, and closer to 100 indicates extreme optimism.

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