Investors are closely monitoring the US economy amid concerns of a potential slowdown, prompting a shift away from risky investments. This trend is particularly evident in the cryptocurrency market, where prices have been experiencing significant fluctuations.
On Monday, Bitcoin plummeted by 15% to $51,600, marking its lowest level since late February. Despite this decline, the popular cryptocurrency has still managed to maintain a 17% increase since the beginning of the year. Other major cryptocurrencies, such as Ethereum (down 22%), BNB (down 19%), and Solana (down 18%), also experienced sharp drops in value.
The cryptocurrency market had witnessed substantial growth in recent years, recovering from a major crash in 2022. During this period, investors had shown a greater appetite for risk as the economy rebounded from the effects of the pandemic. Additionally, some investors had turned to cryptocurrencies as a hedge against inflation.
However, the scenario has evolved in recent months, with inflation showing signs of moderation. As a result, investor sentiment has shifted, with a growing focus on the sluggish job market. Concerns about a potential rate cut by the Federal Reserve have led investors to reevaluate their investment strategies, favoring alternative assets over cryptocurrencies.
