The last twenty-four hours have been a massacre on the cryptocurrency markets. As per data from CoinMarketCap, the global market capitalization has decreased by 13.63 per cent over the past twenty-four hours to $901 billion as of 7:30 AM IST today.
The current price of Bitcoin is $21,049, a decrease of 18.25 per cent.
Ethereum has also experienced a huge decline, plunging 17.49 per cent to $1,118. The BNB token decreased by 14.11 per cent.
XRP of Ripple is also declining. It has decreased by 10.9 per cent over the past 24 hours.
After a 15.17 per cent decline, Dogecoin has slid to tenth place in terms of market capitalisation.
What triggered the bloodbath?
Sharat Chandra, Vice President, Research and Strategy at EarthID told Business Today, “Crypto, as well as equity markets, have come under severe stress. The S&P has fallen by 4 per cent, touching another low in 2022. Contagion in markets is spreading. Market participants will closely watch Fed’s monetary policy meeting, which starts today. Federal Reserve’s options for reining inflation are minimal, and monetary policy tightening seems unavoidable.”
Speaking about Bitcoin, the largest cryptocurrency by market capitalization, he said, “Bitcoin is likely to forge support at the $23K level. The correlation between Bitcoin and US equities has remained high, denoting a lagging price action and referencing selling pressure.”
He further added, “Glassnode data suggests Bitcoin’s 200-day plus downtrend, which began in November 2021, has also contributed to dwindling crypto exchange activity. Bitcoin’s sideways trends can be attributed to lacklustre demand from long-term holders and selling pressure from short-term holders.”
The CoinDCX research team told Business Today, “What initially began as a sell-off in traditional markets eventually led to a massive contagion effect across multiple sectors of the economy, with crypto not spared either.”
They added, “Growing expectations of a sharper Federal Reserve interest rate hike to fight inflation led to an evaporation of investors’ risk appetites across the board, with numerous indices officially entering a bear market.”
Charles Tan, Chief Marketing Officer, Atato, a licensed MPC crypto custodian wallet, told Business Today, “The global financial markets are battered by rising inflation and growing geopolitical uncertainty. The high inflation in rate in some of the most powerful economies of the world has kept the investors on their toes as the crypto market has been dominated by sellers for quite some time now.”
Tan explained further, “It is important to note that traditional financial markets are facing a steep downturn too due to the growing inflationary concerns. The crypto market cap touched crossed the $3 trillion mark for the first time in November last year which was mainly led by Bitcoin as it touched an all-time high of $69,000.”
Speaking of current market conditions, he said, “The current market conditions call for caution and investors should execute their investment strategy depending on their risk appetite. The rising pricing is a matter of concern for the financial markets and respite will come with inflation cooling down to an acceptable level.”
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