The last twenty-four hours have been a massacre in the cryptocurrency markets. According to data from CoinMarketCap, the global market capitalization decreased by 13.63% in the past twenty-four hours to $901 billion at 7:30 a.m. IST today.
The current Bitcoin price is $21,049, down 18.25%.
Ethereum also saw a huge decline, plunging 17.49% to $1,118. The BNB token fell by 14.11%.
Ripple’s XRP is also falling. It has decreased by 10.9% in the past 24 hours.
After a 15.17% decline, Dogecoin slipped to tenth place by market capitalization.
What triggered the bloodbath?
Sharat Chandra, vice president of research and strategy at EarthID, told Business Today: “Crypto, as well as the stock markets, have come under severe stress. The S&P fell 4%, hitting a new low in 2022. Market Contagion Spreads “Market participants will be closely watching the Fed’s monetary policy meeting, which begins today. The Federal Reserve’s options for controlling inflation are minimal, and monetary policy tightening seems inevitable.”
Speaking about Bitcoin, the largest cryptocurrency by market cap, he said, “Bitcoin is likely to forge support at the $23,000 level. The correlation between Bitcoin and US equities remained elevated, denoting lagging price action and alluding to selling pressure.
He added, “Glassnode data suggests that Bitcoin’s 200+ day downtrend, which began in November 2021, also contributed to the decline in crypto exchange activity. Bitcoin’s sideways trends can be attributed to lackluster demand from long-term holders and selling pressure from short-term holders.”
The CoinDCX research team told Business Today, “What started 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: “Rising expectations for a sharper hike in interest rates from the Federal Reserve to fight inflation have led to an evaporation of investor risk appetite across the board, with many indices officially entering a bear market.”
Charles Tan, chief marketing officer at Atato, a licensed MPC crypto custodian wallet, told Business Today: “Global financial markets are battered by rising inflation and growing geopolitical uncertainty. The high rate of inflation in some of the strongest economies in the world has kept investors on their toes as the crypto market has been dominated by sellers for some time now.
Tan explained further: “It is important to note that traditional financial markets are also facing a sharp decline due to growing inflationary concerns. The crypto market capitalization first crossed the $3 trillion mark in November last year, mostly led by Bitcoin as it hit an all-time high of $69,000.
Speaking about current market conditions, he said, “Current market conditions call for caution and investors should execute their investment strategy according to their risk appetite. Rising prices are a concern for financial markets and respite will come when inflation returns to an acceptable level.
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