Bitcoin and Co.: US interest rate hike shakes up the crypto market

The crypto market still cannot sustainably recover. Again and again, new bad news from the classic financial market causes new sell-offs in the global stock markets. Due to the persistently high correlation with the Nasdaq100 technology index, Bitcoin and Co. still unable to free itself from the stranglehold of the classical market in the long term. The Federal Reserve’s monetary policy, which aims to bring inflation under control by any means necessary, continues to have a major impact on all markets.

The central banks set the pace

The fact that the Fed again raised the key interest rate by 75 basis points to 3.25 percent and at the same time confirmed its interest rate target of 4.6 percent for the coming year again led to a broad-based correction in all asset classes on Wednesday evening. As a result, the US Dollar Index (DXY) rose again to a fresh annual high – absolute poison for the crypto market. That the US Federal Reserve continues to push for so-called “quantitative tightening” and that about $60 billion will be pulled out of the market each month is not good news for risky investment sectors.

The hype around The Merge seems to have died down in the short term

The “braced” on Ethereum (ETH) can also not provide any bullish impulses, at least in the short term. Rather, it appears that investors have taken profits across the board. The hype around Proof-of-Work (POW) based cryptocurrencies like Ethereum Classic (ETC) and Ravencoin (RVN) also seems to have evaporated again. Both cryptocurrencies, still among the strongest price performers in previous weeks, were among the biggest losers in the last seven trading days. One of the few bright spots this week is Ripple (XRP) price action. The price of the fifth largest cryptocurrency escapes market weakness and bucks the trend by 30 percent. On the other hand, the Vasil upgrade that started today at Cardano does not seem to have a positive effect on the ADA course. The bearish market environment also sent total market capitalization down to a new 50-day low of $878 billion.

Total market value based on values ​​of Cryptocap displayed.

Price development of top 10 altcoins

  • A look at the price performance of the top 10 altcoins paints a bearish picture. With the exception of Ripple, all other major cryptocurrencies lose value in a weekly comparison, some significantly.
  • The long list of losers is led by Ethereum (ETH) with a price drop of 22 percent.
  • Shiba Inu (SHIB) with 13 percent and Polkadot (DOT) with a price drop of 12 percent also corrected double-digit values.
  • On the other hand, Solana (SOL) and Cardano (ADA), with a price drop of just over six percent, have a similar high discount to the main cryptocurrency Bitcoin.
  • Dogecoin (DOGE) and Tron (TRX), which have climbed back into the top 10, are doing relatively well, each with a value correction of only about three percent.

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Stability of the top 10

  • Despite the continued strength of the US dollar and global interest rate adjustments, Bitcoin can still hold up relatively well.
  • With BTC dominance currently between 40 and 41 percent trying to bottom out, Bitcoin should outperform the Altcoin sector if market strength picks up again in the coming weeks.
  • The low trading volume of the key cryptocurrency is increasingly problematic here. Any price increases do not show any increase in sales, making a release even more difficult.

Much depends on the performance of the classic financial market

  • If the classic stock indices Nasdaq100 and S&P500 continue to fall in the coming days, it will not leave the crypto market untouched.
  • If new annual lows are formed in the US stock markets, Bitcoin can also be expected to fall below the previous low in 2022.
  • Bitcoin should try not to abandon the area around USD 18,000. On the upside, the bulls need to regain the USD 20,000 mark first to target the resistance at USD 20,800 in the next step.
  • Looking at the ranking of the top 10 altcoins, there is a change of place. Polygon (MATIC) has to make way for Tron (TRX) after a 15 percent setback, which has now crawled back to 10th place.

This week’s winners and losers

  • The renewed price weakness of Bitcoin and especially the second largest cryptocurrency Ethereum has recently had a significant negative effect on the price development of the top 100 altcoins.
  • Only 15 of the top 100 cryptocurrencies show a price increase in a weekly comparison.
  • Ripple tops the short list of outperformers with a 30 percent price increase, followed by soccer token Chiliz (CHZ) at 27 percent.
  • Algorand (ALGO) may also rise in double digits with a 20 percent increase in value. Both Chiliz and Algorand are benefiting from the growing interest in soccer NFTs just weeks before the start of the soccer World Cup in Qatar.
  • Apecoin (APE) is also currently benefiting from the introduction of staking, gaining 14 percent.

After the merger, sales started

  • The long list of weekly losers is led by Ravencoin with a 44 percent price drop, followed by Ethereum Classic with 28 percent.
  • These two POW coins are followed by two Ethereum staking providers, Rocket Pool (RPL) and Lido Staked Ether (LDO). However, this price drop should not be surprising in light of the rebound in the Ethereum price.
  • Overall, about 40 of the 85 losers have lost double digits in the past seven trading days.

Disclaimer: The price estimates presented on this page do not represent buy or sell recommendations. They are just an assessment by the analyst.

The map images are made using TradingView created.

USD/EUR exchange rate at time of printing: EUR 1.00.

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