What happened ?
Sales of crypto today it countered much of the positive sentiment we have seen materialize in this sector in recent weeks. At 12:30 EST, major cryptocurrencies Bitcoin (BTC 1.37%), Ethereum (ETH 3.88%) and Dogecoin (DOGE 2.24%) fell 5.1%, 9%, 0.7, respectively. % and 6.8% in the last 24 hours.
This abrupt change in sentiment appears to be linked to the dissipation of the hype surrounding the upcoming Ethereum merger, which has driven a significant chunk of the industry’s gains in recent weeks. This might interest you: ZRX Strengthens Coinbase Market: Will ZRX Price Increase 100x Soon?.
This move in the cryptocurrency market has been mirrored by equity markets, which are also down substantially today as investors await the Federal Reserve’s decision on the next interest rate policy. This week, the Federal Open Market Committee is expected to announce a 75 basis point (0.75%) rate hike, which will bring the overnight federal funds rate above 2% for the first few times since the pre-pandemic era.
Bitcoin liquidations spiked on the news as trading volumes remained very high.
In recent weeks, Ethereum has been one of the most volatile large cap tokens on the market. Consequently, its dramatic decline today must be put into perspective. This might interest you: The first European ETF launched by Grayscale.
After all, this is a token that has grown significantly lately, in anticipation of the upcoming network merger. So, on down days like today, it makes sense to see higher selling interests materialize as investors take profits and make short-term gains.
Broad macroeconomic concerns appear to warrant a cautious approach by growing investors as risky assets are revalued. Some analysts have raised the possibility of a longer-lasting bear market for stocks as an incentive for investors to avoid riskier asset classes like cryptocurrencies. Whether or not such a prolonged bear market is in sight is still up for debate among investors, which leads to excessive volatility as price discovery unfolds.
The global cryptocurrency market continues to swing just above the psychologically important $ 1 trillion market cap. As a result, cryptocurrency investors fear that traders will be incentivized to hit the sell button if we return to 12-digit territory. This might interest you: 2 good reasons to buy Ethereum now and 1 reason to wait. In the coming weeks, increased volatility could become the norm as investors push and pull on this seemingly critical level.
Also, it will be interesting to see how the cryptocurrency market reacts to the Fed’s decision this week. If this rate hike is greeted with relief or pessimism, it’s something many will be interested to see.
For long-term investors in these flagship cryptocurrencies, the next few days and weeks appear to be exciting (for lack of a better word).
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