Big crash in cryptocurrencies
1Big crash in cryptocurrencies
Bitcoin, which rose over 5 percent on Wednesday and rose above the $ 40,000 resistance, experienced a major collapse the other day. The leading coin has lost more than 10% in value. Ethereum's decline is close to 9 percent. So why are cryptocurrencies declining? Here are the details...
The eyes of the markets were on the US Federal Reserve's (Fed) interest rate decision, which was announced on Wednesday. In line with the expectations, the Fed increased the policy rate by 50 basis points to the range of 0.75-1 percent. Fed Chairman Jerome Powell, who gave messages to the markets after the critical development, said that it is not on the agenda for the Fed to increase interest rates by 75 basis points in the upcoming meetings. After this development, the rises in cryptocurrencies gained momentum.
CRYPTO COINS ERASE FED'S INFLUENCES
Bitcoin and Ethereum gained more than 5 percent after the Fed's interest rate decision. Although Bitcoin rose above the $ 40,000 resistance on Wednesday, it could not maintain its permanence here. Ethereum, on the other hand, had risen to $ 2,965. Although the Fed's interest rate move was welcomed in the markets, this situation was short-lived. On Thursday, the tide turned in the cryptocurrency market and there were huge losses.
REcession Concern HAS SHARED THE MARKET
Although cryptocurrencies rose for a short time after the Fed's monetary tightening and the announcement that a 75 basis point interest rate hike was not on the agenda, concerns that the US economy might enter a recession swept the market.
The hot money injected into the economy was abandoned after the Fed, which followed an ultra-loose monetary policy during the pandemic, started to increase interest rates as of March and announced that it would narrow its balance sheet, which reached approximately 9 trillion dollars.
With the increase in the policy rate, the US 10-year bond interest rate has reached the peak of 3 years, while loan rates continue to rise. This situation raises concerns that the US economy may enter recession.
BITCOIN DROP OVER 10 PERCENT
Bitcoin, which started the day at $ 39 thousand 690, followed a calm course in the morning. Bitcoin, which fell sharply in the evening, retreated to $ 35 thousand 571 and fell more than 10 percent. The sharp movements in Bitcoin had an impact on cryptocurrencies in general. Bitcoin is currently trading at $ 36 thousand 470.
ETHEREUM DECREASED CLOSE TO 9 PERCENT
The price of Ethereum, the second highest volume digital asset after Bitcoin, dropped from $ 2,940 to $ 2,683 in the past day. Ethereum's daily depreciation approached 9 percent. Ethereum is currently trading at $2,750. The sharp declines seen in the highest volume cryptocurrencies make investors nervous.
US EXCHANGES CRACKED
On the other hand, with the effect of recession concerns, US stock markets suffered a great loss in the past day. While the S&P 500 index, which includes the largest 500 companies in the USA, decreased by 3.56 percent, the Nasdaq 100 index, which includes the largest 100 technology companies, decreased by 5 percent and the Dow Jones index decreased by 3.12 percent.
With the sharp decline of the US stock markets, the decline in cryptocurrencies accelerated. Especially recently, the positive correlation between the Nasdaq 100 index and Bitcoin attracts the attention of investors. The Nasdaq 100 index exhibited its worst performance since June 2020, with the effect of the big crash that took place last day. This triggered the sharp decline in cryptocurrencies.
MORE THAN $400 MILLION CRYPTO MONEY STEAL
With the effect of the sharp decline in cryptocurrencies, liquidations have been seen in leveraged transactions in cryptocurrencies in the last 24 hours. While more than $ 400 million of cryptocurrencies were liquid, the largest liquidation was seen in BTC / USDT parity on the Okex exchange with $ 3.74 million.
In the last 24 hours, 191 million dollars of Bitcoin and 64 million dollars of Ethereum positions were liquidated.
CRYPTO CURRENCIES TURNED IN RED
With the impact of the sharp decline led by Bitcoin and Ethereum, cryptocurrencies retreated from $ 1.80 trillion to $ 1.64 trillion in the past day. The daily loss in digital assets was 7.13 percent. The total market cap of cryptocurrencies today stands at $1.66 trillion.