Bitcoin broke below the critical $40,000 psychological level on April 22, 2022, as a perfect storm of hawkish Federal Reserve expectations, tightening financial conditions, and geopolitical uncertainty continued to weigh on digital assets. The decline marked the first time BTC had fallen below the key threshold since late January, signaling deepening bearish sentiment across the cryptocurrency market.
According to CoinMarketCap historical data, Bitcoin closed the day at approximately $39,740, representing a 1.94% decline over 24 hours and extending a 2.01% weekly loss. The flagship cryptocurrency’s market capitalization stood at roughly $755.8 billion, with 24-hour trading volume reaching approximately $28 billion.
TL;DR
- Bitcoin fell below $40,000 on April 22, reaching $39,740 — its lowest level since January 2022
- Ethereum traded at $2,965, down alongside BTC as risk-off sentiment dominated
- Total crypto market cap dropped to $1.87 trillion, down from $2.1 trillion two weeks earlier
- Fed’s aggressive tightening path and Ukraine war fallout drove risk aversion across all asset classes
- Terra (LUNA) users lost $4.31 million in a phishing attack, adding to negative sentiment
- Bitcoin ranged between $38,700 and $42,100 during the Easter-shortened trading week
The Fed Squeeze Tightens
The primary catalyst behind Bitcoin’s decline was the growing conviction among investors that the Federal Reserve would pursue an aggressively hawkish monetary policy path. With U.S. inflation running at its hottest pace in four decades, markets had begun pricing in the possibility of multiple 50-basis-point rate hikes in the coming months — a prospect that weighed heavily on risk assets of all kinds.
Cryptocurrencies, which had traded in increasingly tight correlation with growth stocks and the Nasdaq throughout 2022, were not spared. The same dynamics that drove the Nasdaq lower — rising Treasury yields, tightening liquidity conditions, and a strengthening dollar — pulled Bitcoin and the broader crypto market down with them. The IMF’s April 2022 Global Financial Stability Report, published just days earlier on April 18, explicitly noted that financial conditions had tightened and risks to the global economy had increased as a result of the war in Ukraine, compounding the hawkish monetary policy headwinds.
A Quiet Week Masks Building Pressure
The Easter holiday weekend (April 15-18) had provided a temporary reprieve. With traditional markets closed across much of Europe and reduced participation from institutional traders, crypto trading volumes dropped substantially. Bitcoin traded in a relatively narrow $38,700 to $42,100 range over the seven days ending April 22, while Ethereum oscillated between $2,900 and $3,170. The average performance of the top 10 cryptocurrencies by market cap was a barely noticeable 2% over the week.
But the low volume was not a sign of stability — it was a sign of caution. Many traders had reduced their positions heading into the holiday weekend, unwilling to hold large risk exposures during a period when liquidity would be thin and unexpected news could cause outsized price swings. When full participation resumed, the selling pressure that had been building beneath the surface quickly manifested.
Terra Users Hit by $4.31 Million Phishing Attack
Adding to the day’s negative tone, blockchain security firm SlowMist reported that Terra (LUNA) network users had been scammed out of approximately $4.31 million in a phishing attack. The incident underscored ongoing security concerns in the DeFi ecosystem and contributed to the risk-off mood. Despite the attack, Terra (LUNA) was still trading near $94 — though the protocol was just weeks away from its catastrophic collapse in May 2022 that would wipe out tens of billions in market value.
The Terra phishing attack was part of a broader pattern of increasingly bold crypto thefts that the Wall Street Journal would highlight in an April 22 report titled “Crypto Thieves Get Bolder by the Heist, Stealing Record Amounts.” The report documented how hackers were exploiting vulnerabilities across DeFi protocols, bridges, and user wallets with growing sophistication.
Stripes Crypto Payments Debut
Amid the market gloom, there were signs of mainstream adoption progressing. Stripe, the major payment processing company, announced on April 22 that it was expanding its global payouts infrastructure with cryptocurrency support. The move signaled that despite the bearish price action, traditional fintech companies continued to see long-term value in crypto payment rails. The announcement was a reminder that price volatility and infrastructure development often move on different timelines.
What Comes Next
Market analysts were divided on Bitcoin’s near-term trajectory. Some pointed to the $38,000 level as critical support, noting that a break below could trigger cascading liquidations and a deeper sell-off. Others argued that the consolidation between $38,000 and $42,000 represented a healthy reset after the parabolic moves of 2021, and that the macro headwinds were already largely priced in.
What was clear, however, was that the era of easy money that had fueled Bitcoin’s rise from $10,000 to $69,000 was ending. The Fed had pivoted decisively toward tightening, and risk assets everywhere were feeling the impact. The crypto market’s correlation with traditional finance, once seen as a sign of maturation, was now a double-edged sword — bringing institutional capital during bull markets but also institutional selling pressure during bear markets.
The week ahead would bring the Fed’s May 4 policy decision, where a 50-basis-point hike was widely expected. How Bitcoin and the broader market would respond remained the central question on every crypto trader’s mind.
Why This Matters
April 22, 2022, captured the cryptocurrency market at a critical inflection point. Bitcoin’s loss of the $40,000 level was not just a technical milestone — it was a symptom of the fundamental shift in macro conditions that would define the rest of 2022. The Fed’s aggressive rate hiking cycle, which would continue throughout the year, combined with the Terra-Luna collapse in May and the cascading bankruptcies that followed, would push Bitcoin to as low as $15,500 by November.
Understanding this period is essential for recognizing how macro monetary policy drives cryptocurrency markets. The lesson is clear: when the Fed tightens, risk assets bleed — and crypto, despite its decentralized ethos, is not immune. The events of April 2022 also highlight the security vulnerabilities that continue to plague the DeFi ecosystem, with the Terra phishing attack foreshadowing the much larger disaster that would unfold just weeks later.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry significant risk. Always conduct your own research before making investment decisions.
multiple 50bps hikes priced in and btc still at 39740. honestly thought it would be worse. the 38700 low held
LUNA users losing 4.31M in a phishing attack on the same day. what a week that was. the real collapse was only weeks away and nobody saw it coming
crypto correlating with nasdaq was the new normal by then. the decoupling narrative officially died in Q1 2022
^ remember when everyone said btc was digital gold and would protect against inflation? yeah that aged poorly at 39k while cpi was 8.5%