Cryptocurrency market capitalization takes a 20% hit as Bitcoin and other digital currencies experience steep decline

Cryptocurrencies experienced a sharp decline of nearly 10% in just a few hours, with Bitcoin leading the way. The largest cryptocurrency by market capitalization plummeted to around $57,000 USD, losing over 20% of its value compared to its all-time high in mid-March. Many other digital currencies lost more than 20% of their value, signaling a bear market for cryptocurrencies.

The decline in cryptocurrencies is in sync with traditional markets as the Nasdaq index fell 2% and the S&P 500 lost 1.6% on the same day. Analysts attribute the downward trend in cryptocurrency markets to expectations for higher interest rates by the US Federal Reserve due to persistent inflation, which is also leading to a stronger position for the USD. Futures trading positions worth nearly $100 million were liquidated on exchanges in the past hour, totaling close to $500 million in liquidations over a 24-hour period.

The total cryptocurrency market capitalization has decreased by almost 20% since its peak in March, marking the largest decline in cryptocurrency capitalization since June 2022, according to data from TradingView. In April alone, Bitcoin lost nearly 18% of its value, while Ethereum dropped around 19%. Altcoins like SOL are facing even deeper corrections of 35-40% this month.