Bitcoin (BTC) has slumped to the support level of $45,000 on Wednesday morning even as overall buying activity remained positive.
A global selloff driven by hawkish comments from the U.S. Federal Reserve likely triggered the fall.
Fed Governor Lael Brainard said curbing inflation was “paramount,” hinting at trimming the central bank’s balance sheet in May.
This led to a selloff in the market as investors feared a restrictive environment could lead to an economic downturn.
The S&P 500 ended 1.26% lower on Tuesday, while the technology-heavy Nasdaq dropped 2.26%.
The downturn spread to Asia this morning, with Japan’s Nikkei 225 falling 1.48% and Hong Kong’s Hang Seng dropping 1.15%
Weakness in Bitcoin led to a broader fall in the crypto market.
In the past 24 hours, ether (ETH), Solana’s SOL, and XRP fell 5%, while Avalanche’s AVAX and Polkadot’s DOT fell over 6%.
Dogecoin’s DOGE was the only gainer among majors, buoyed by optimism around Elon Musk’s appointment to the board of social media platform Twitter, which is being viewed as a positive sign for the memecoin.
Bitcoin’s slump comes a week after the asset touched three-month highs of $48,000.
It fell to $44,500 – a level that has seen buying activity – for the second time this week, breaking through which could see a drop to $43,000.
