The crypto market has seen a sharp drop in the last 24 hours. It has fallen over 3% from 3.90 trillion it now sits at $3.74 trillion. While the SEC has been changing its ways to embrace crypto, it seems that Fed’s relentless approach towards keeping interest rates unchanged is hurting markets more than ever.
The US tariffs and economic and job data reports have trickled down both crypto and equity markets. Historically, any macroeconomic uncertainty, especially related to trade tensions, can trigger a sell-off in riskier assets like cryptocurrencies.
If the current bearish trend persists, the total crypto market cap could face a further decline. A drop below the $3.73 trillion support level would likely lead to a test of the $3.61 trillion mark.
Bitcoin, Ethereum, XRP and Crypto Based Stocks Slump
Bitcoin slid to $117,000, Ethereum nosedived $3,760 and XRP slumped to $3.90. Coinbase fell by 2.5%, Bitmine fell by 7.41% and global payments platform Paypal also fell by 9.52%.
Kraken dropped its OTC report last week, recording that Bitcoin peaked its all time high – $123,000 and since then has seen a modest pullback.
Fed’s Stance: Constructive Crypto Regulation With High Interest Rates
The Federal Reserve’s continued hawkish stance, which signals higher interest rates to combat inflation, is making riskier assets like cryptocurrencies less appealing to investors. This has been compounded by significant liquidations, with over $631 million in leveraged positions being automatically sold off as prices fell, exacerbating the downward pressure.
Wrap Up
Despite the current market downturn, technical analysis suggests a longer-term bullish trend remains intact. The current correction appears to be a temporary Wave 4, which is often followed by a significant rally toward new all-time highs for both Bitcoin and altcoins.
