Worst week since 2020: What’s Happening to Bitcoin and Ethereum

As of Friday, the cryptocurrency market is back in a steep peak. Total capitalization fell to $1.148 trillion. Unfortunately, since yesterday, rates from the top 10 cryptocurrencies have lost an average of 9%. Let’s take a look at what’s going on.

Bitcoin

The sell-off caused bitcoin to lose 6.39% of its value. It is now trading at $27,300.

• Market capitalization: $524.29 billion (-6.38%).
• 24-hour trading volume: $26,673 million (-10.47%).
• 24-hour high: $29,406
• 24-hour low: $29,508
• Fear and Greed Index: 14 (extreme fear).

Michael de Van Poppe predicts that the 24/26k mark is now at stake.

Ethereum

Ethereum has fallen to $1459.46, its lowest since January 2021 (down 13.03%).

• Market capitalization: $176.8 billion (-13.02%).
• 24-hour trading volume: $23,265 million (+3.85%).
• 24-hour high: $1678.07
• 24-hour low: $1459.46

Interestingly, Arthur Hayes warned in his essays that Ethereum could fall as low as $1k, but he expects five-figure prices for ETN in the long run.

Reasons

The decline in the cryptocurrency market occurred at the same time as the stock market. There’s also been panic and selling off since Friday, with the S&P 500 losing 2.9% and the Nasdaq down 3.5%.

The reason is the new data on inflation in the United States. This figure is the highest since 1981 (8.6%).

Rising inflation will likely prompt the U.S. Federal Reserve to further reduce its bond purchases and continue to raise interest rates.

According to Bloomberg, traders expect three rate hikes in June, July and September, respectively.

As a result, there will be a shortage of liquidity in the market. That means investors will give up investing in tech stocks and cryptocurrencies, choosing traditional assets.

Meanwhile, popular commenter WhalePanda warns panicked investors that “selling your bitcoins because of high inflation is one of the dumbest things.”