It was a sea of red in the cryptocurrency industry as the price of Bitcoin crashed below $60,000 for the first time in weeks ahead of the Federal Reserve. Arweave price dropped by over 15% in the past 24 hours. It has plunged by over 37% from its highest point this year.
Altcoin prices are falling
Gala token dropped by over 52% from its highest level this year. Similarly, the price of VeChain (VET) and Pepe have fallen by over 10% in the past 24 hours. The two tokens have fallen by over 40% from their highest point this year. Other underperforming cryptocurrencies were IOTA, Ethena, Nervos Network, Akash Network, and Stacks.
This price action explains why the fear and greed index has moved from the extreme greed zone of 85 to about 50 today. At the same time, the US dollar index (DXY) has jumped from the year-to-date low of $100 to over $106. In most cases, cryptocurrencies tend to drop sharply when the dollar is soaring.
Cryptocurrencies are not the only assets in the red. American equities have also been in the deep red. The Nasdaq 100 index had the first monthly decline since October in April as it plunged by over 5.70% from its highest level this year.
Similarly, the Dow Jones and the S&P 500 indices also dropped sharply during the month. The S&P 500 pulled back by 4.40% from its highest level in March while the Dow Jones was down by over 5.38%.
Read more: How to buy VeChain.
Federal Reserve decision ahead
Bitcoin has formed a bearish engulfing pattern
This trend may continue in May as the Federal Reserve concludes its two-day meeting on Wednesday. Economists expect the Fed will deliver a hawkish pause since inflation has remained at an elevated level.
Data shows that the headline Consumer Price Index (CPI) rose to 3.5% in March while the core CPI jumped to 3.8%. The Personal Consumption Expenditure (PCE) figure rose to 2.5% while the core PCE jumped to 2.8%. These numbers mean that inflation is taking longer to move to 2%.
The other risk for tokens like Gala, VeChain, IOTA, and Pepe is that Bitcoin has formed a bearish engulfing pattern on the monthly chart. That means that the outlook for the coin is extremely bearish, at least in the near term.
In the long-term, however, the price of Bitcoin has formed a cup and handle pattern, which is a positive sign. This means that the coin will resume its bullish trend in the coming months.
