The broader crypto markets have been particularly shaken up in the previous 24 hours, with Bitcoin falling below the $26,000 threshold once more. Bitcoin is currently selling at $25,168.94, down 16% in the last week, according to statistics from Coingecko published on Monday.
As Bitcoin fell to its lowest level since late 2020, the entire cryptocurrency market is feeling the squeeze of recession fears, which could deter investors from placing riskier wagers.
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However, alternative coins are affected far as severely. Ethereum, for instance, has fallen below $1,500, down 70 percent from its all-time high of over $4,900 in November 2021. In the past 24 hours, Dogecoin, TRON, and Avalanche all witnessed double-digit losses.
The overall market capitalization of cryptocurrencies has been trading in a declining channel for the past month and is currently supported at $1.17 trillion.
The crypto market has become increasingly tied to traditional equity markets in recent months (CNBC).
$100-B Wiped Out From Crypto Market
The cryptocurrency market lost more than $100 billion over the weekend after United States Treasury Secretary Janet Yellen offered a gloomy crypto warning.
The market valuation of Bitcoin has decreased to $520 billion. The silver lining for BTC bulls is that their control over alternative cryptocurrencies has increased to about 48 percent.
After a few brief and fruitless bids to surpass $32,000 in the last seven days, the world’s largest cryptocurrency began to progressively lose value. Bitcoin’s last rejection at this level sent its price down to $30,000, where it remained for several days.
BTC total market cap at $498 billion on the weekend chart | Source: TradingView.com
Rich Blake of the cryptocurrency startup Uphold says:
“Crypto appears to be losing the ideal opportunity to illustrate its forgotten function as a hedge against inflation.”
Inflation Jitters And Bitcoin’s Volatility
Inflation estimates for the United States, 8.6 percent, were announced late Friday. The four-decade record increased Bitcoin’s volatility, resulting in today’s plunge to the $25,000 mark.
In recent months, the crypto market has become increasingly connected with traditional equity markets. The Nasdaq, which focuses on technology, was down 3.5%, while the S&P 500 and Dow Jones Industrial Average were down more than 2.5%.
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Next week’s two-day meeting of the US Federal Reserve is anticipated to result in a further increase in interest rates. This week, Yellen also cautioned against putting cryptocurrency in 401(k) plans, adding to the gloomy sentiment.
Last week, the central banks of Australia and Canada, where inflation has also intensified, raised their rates by approximately 50 basis points, while the European Central Bank announced it would cease asset purchases and begin rate hikes later this summer.
Featured image from Reynolds and Reynolds, chart from TradingView.com