Crypto markets continue to decline after regulatory action last week and Fed notes yesterday. So, what are the consequences of the decline in cryptocurrencies after the recent announcements?
Current Situation in Altcoins!
Last week, Cardano (ADA) was the biggest loser among the top ten cryptocurrencies in the market, with a 22% drop. According to CoinGecko, the asset fell 7% in the last day. Other major losers of last week include Binance’s BNB token (10.3% drop), XRP (9.1% drop), and Dogecoin (9.5% drop). In addition, Bitcoin (BTC) fell below $25,000 on Wednesday morning, trading at $24,900 with a 4% decrease. Throughout the week, the largest cryptocurrency in the market has fallen 6%.
Data from CoinGecko indicates that the total cryptocurrency has lost 4.2%, or roughly $40 billion in the last 24 hours. Ethereum (ETH) fell 6.4% to reach its lowest level in three months at $1,630. On a weekly timeline, ETH has dropped more than 11.3%.
The markets initially showed a soft reaction to the Fed’s decision, trading sideways after the meeting, but the decline accelerated on Thursday morning. The U.S. central bank maintained the interest rate, changing the benchmark interest rate at the Federal Open Market Committee (FOMC) meeting on Wednesday.
Fed Results!
Hints were also given that several interest hikes could be made by the end of the year. Interest rate hikes make borrowing expensive by increasing the cost of debt, narrowing the space for wage and job growth. At the same time, high-interest rates on direct bank deposits and government bonds can make stocks and crypto less attractive to investors. The 0.17% increase of the dollar index (DXY) against other inverse currencies today further confirms that the price movement originates from the Fed’s decision.
Following the news, the S&P 500 index and the tech-heavy Nasdaq 100 indices fell, with the U.S. stock market also reacting negatively to the Fed’s uncertain interest rate hike. However, stock indices recovered their intra-day losses, with the S&P closing the day with a 0.08% gain and the Nasdaq with a 0.86% gain.
