The Crypto market is on a bearish trend again after rallying last week. The downward pressure emanates from a looming interest rate hike by the Federal Reserve.
The Federal Reserve convened yesterday. Experts and analysts expect the lender of last resort to increase the rate by at least 0.75% to mop up the excess liquidity in the market. Following the adjustment, the benchmark rate will range between 2.25% and 2.50%, the highest since 2019. Federal Reserve Chairman Jerome Powell aims to tame inflation which has been rising at the fastest pace for 40 years.
The Crypto Market Is in The Red
Last week, the Crypto market was in the green, and the market capitalization rose above $1,000,000,000,000. Following the market correction, the market capitalization has plunged below the mark to $970 billion.
The daily transaction volume across Crypto trading platforms has also plummeted to $61 million in the last 24 hours. The plunge indicates that the investors have adopted a wait-and-see attitude before deciding whether to short-sell or long-sell. Meanwhile, the reduced market activity cannot prevent prices from falling, given the influence of the Federal Reserve on markets.
Bitcoin Analysis
BTC is currently trading at over $21,000. Compared to its 30-day peak of $24,109 on July 20th. From the trend analysis, Bitcoin is heading to a new low, but the $20,000 level of support is expected to shield the largest Crypto from a further plunge.
The dominance of BTC has also marginally reduced to 41.6%. However, the impact of the bears is the same for Altcoins. The decline is a result of the stability of Stablecoins such as the Tether (USDT), USD Coin (USDC), and Binance USD (BUSD); the 3rd, 4th, and 6th largest Digital Assets by market capitalization. Ethereum is also gaining prominence, accounting for 18% of the market valuation.
Regarding daily transaction volume, fewer BTC tokens are changing hands, and the volume plummeted to 30% after the news of the Federal Reserve meeting hit the airwaves. The proportion of BTC circulating in the market is now less than 7%, as only 1.23 million tokens were traded yesterday against a circulating supply of 19 million.
Altcoins Are Also in The Red
Ethereum has shed off 8.06% in the last seven days, although the ETH has recovered 0.21% of its price in the last 24 hours. The largest Altcoin is trading below the $1,500 level as the current price is slightly above $1,400.
Ripple (XRP), Cardano (ADA), Cardano (SOL), and Dogecoin (DOGE) have been more bearish in the last seven days. The Altcoins have lost 11%, 12%, 20%, and 12%, respectively. The Cryptos have, however, stabilized in the last 24 hours with no further losses.