Crypto Market Rocked, Bitcoin and Ethereum Down Over 4% Amidst Dollar Surge

The cryptocurrency market has experienced significant volatility, with Bitcoin and Ethereum showcasing substantial price fluctuations. Bitcoin traded at $73,000 at its peak, but has since declined over 5% to $66,010, while Ethereum dropped over 4% to $3,336. Meanwhile, the dollar index rallied to a 4-and-a-half-month high due to a stronger-than-expected US manufacturing PMI report for March.

Cryptocurrency Market Experiences Volatility, Bitcoin and Ethereum See Over 4% Decline

New York City, April 4, 2024 - The cryptocurrency market has witnessed significant price fluctuations in the past month, with Bitcoin (BTC) and Ethereum (ETH) experiencing substantial gains and losses. Today, both cryptocurrencies have seen a notable decline, with Bitcoin dropping over 5% and Ethereum falling by more than 4%.

Bitcoin and Ethereum Price Fluctuations

From March 2, 2024, to April 2, 2024, Bitcoin's price ranged from a high of $73,740.9 to a low of $60,138.2. On April 2, 2024, Bitcoin's price stood at $66,010.9, marking a change of -5.24% from the previous day.

Similarly, Ethereum's price has exhibited volatility. Within the same period, Ethereum's price reached a high of $4,091.28 and a low of $3,063.60. On April 2, 2024, Ethereum's price experienced a notable decline of -4.75%, closing at $3,336.30.

Dollar Index Gains Momentum

The dollar index (DXY) has rallied to a 4-and-a-half-month high, supported by a stronger-than-expected US manufacturing PMI report for March. The February personal spending report had initially contributed to the rise in the dollar index.

The March ISM manufacturing index, which measures the health of the manufacturing sector, exceeded economists' expectations, rising by +2.5 to 50.3. This represents the highest level in one-and-a-half years. The Prices Paid sub-index also recorded a significant increase, reaching a one-and-a-half-year high of 55.8, exceeding forecasts.

The positive PMI data suggests a more robust economic outlook, with manufacturing activity expanding more than anticipated. This has implications for interest rate policies, as it may influence the Federal Reserve's decisions on rate adjustments.

Implications for Monetary Policy

The ISM manufacturing index report has sparked speculation regarding the Federal Reserve's monetary policy stance. Some analysts believe that the positive PMI data could lead to a more hawkish approach from the Fed, with potential interest rate hikes.

Treasury yields have also risen in response to the PMI report, reflecting investors' expectations for a tighter monetary policy in light of the strong manufacturing data.

Market Outlook and Analysis

The evolving financial landscape has created uncertainty in the cryptocurrency market. Given the Federal Reserve's plan to cut interest rates three times this year, market participants are evaluating the implications of the robust PMI data on the Fed's policy stance.

Some analysts believe that the Fed may reassess its plan in light of the strong manufacturing data, potentially leading to a more cautious approach to interest rate cuts.

Others suggest that the Fed may continue with its planned rate cuts, as the PMI data is considered to be a reflection of current economic conditions and may not necessarily indicate a significant change in the long-term outlook.

Conclusion

The cryptocurrency market remains volatile, with Bitcoin and Ethereum experiencing significant price fluctuations. The dollar index has strengthened following a positive ISM manufacturing index report, raising questions about the Federal Reserve's monetary policy stance and the outlook for the economy.

As the financial situation continues to evolve, investors are closely monitoring the Fed's actions and market movements to make informed decisions.