The cryptocurrency market experienced a notable downturn on April 2nd, with Bitcoin leading the decline as it fell 5.8% to $66,398 in Tuesday’s trading session. Ethereum, the second largest crypto token, also took a hit, plunging over 6.6% to $3,365. The catalyst behind this drop was the release of US manufacturing sector data for March, which showed stronger-than-expected growth.
According to the Institute for Supply Management (ISM), US manufacturing grew for the first time in 1-1/2 years in March, with production rebounding sharply and new orders increasing. The manufacturing Purchasing Managers’ Index (PMI) rose to 50.3 last month, the highest reading since September 2022, signaling expansion in the sector. This positive data reinforced the view that the Federal Reserve might be slow to cut rates in June, prompting a sell-off in Bitcoin and other cryptocurrencies.
Commenting on the market reaction, Edul Patel, CEO of Mudrex, stated, “Bitcoin fell to the $66,000 mark as strong US data supported the view that the Federal Reserve will be slow to cut rates in June.” Similarly, Shivam Thakral, CEO of BuyUcoin, noted, “Bitcoin made a pullback of more than 5% and plunged to $66,000 in response to US manufacturing sector data for March, which rose more than expected.”
The sell-off extended to other altcoins as well, with Solana (-8.7%), BNB (-5.8%), XRP (-4.5%), Dogecoin (-12.8%), Cardano (-7.6%), Shiba Inu (-10.3%), and Bitcoin Cash (-12.8%) declining in value.
Overall, the global cryptocurrency market cap declined 6% to around $2.52 trillion in the last 24 hours. Despite the downturn, the total volume in DeFi stood at $10.72 billion, comprising 9.07% of the total crypto market 24-hour volume. Additionally, the volume of all stablecoins reached $107.54 billion, representing 91.05% of the total crypto market 24-hour volume.
Bitcoin’s market cap fell to $1.312 trillion, with its dominance currently at 52.14%. However, BTC volume in the last 24 hours rose 101.5% to $42 billion, indicating heightened trading activity amidst the market turbulence.
Looking ahead, Vikram Subburaj, CEO of Giottus, suggested that Bitcoin’s retest of $61,000 last month should serve as strong support in case of further dips. He advised investors to consider buying the dips to capitalize on potential opportunities.
As the cryptocurrency market continues to navigate through volatility, strategic decision-making and a keen understanding of market dynamics remain crucial for investors and traders alike.
