Bitcoin Plummeted 10% in 6 Hours, Someone Still Makes More Than 1000% ROI

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With the panic sell-off brought about by US stocks, the futures market has also been very volatile. In fact, Bitcoin (BTC) dropped by nearly 10% in 6 hours, reversing the whole rally on May 5. And this plunge has also made more people apprehensive. At the time of writing, BTC is trading around USD 36,300, reaching a two-month low. This passage indicates that from the fundamental and technical aspects, BTC still faces challenges to resume the uptrend. 

On May 4, after Fed’s Chairman Jerome Powell’s comment that it wasn't likely to raise interest rates at an oversize 75 basis points, BTC soared in a relief rally and hit USD 40,000 for a short time. However, Powell also said that additional 50bps increases should be on the table at the next couple of meetings and the overarching focus is to bring inflation down to 2% goal. In the face of Fed’s increasing hawkish expectations and macroeconomic changes, BTC could yield further downside towards the low in Jan 24 (USD 32,900). 

Stock markets saw huge losses on May 5 in post-Fed trading. The Dow dropped 1,120 points, or 3.3%, the S&P 500 fell 3.7%. The Nasdaq Composite tumbled 5.2%, its worst day since 2020. The rapid market changes indicate that the equities market is still heavily affected by the Fed's policy decision. Higher interest rates can diminish the allure of technology stocks by reducing the value that investors place on their future earnings. Bonds with higher yields or safe haven assets like gold in general will be more attractive versus risky assets such as stocks and crypto. 

What’s worth to be noting is that according to CryptoQuant’s statistics, S&P500 and BTC