Why are major cryptocurrencies like Bitcoin (BTC), Ethereum (ETH) and Dogecoin (DOGE) crashing today?

What happened ?

Sale of cryptocurrency today wiped out much of the positive sentiment we’ve seen emerging in this sector in recent weeks. As of 12:30 p.m. EST, the major cryptocurrencies Bitcoin (BTC 1.37%), Ethereum (ETH 3.88%) and Dogecoin (DOGE 2.24%) fell 5.1%, 9%, 0.7% and respectively. 6.8% in the last 24 hours .

This abrupt shift in sentiment appears to be related to the fading of the hype surrounding the upcoming Ethereum merger, which has caused a significant chunk of the sector’s gains in recent weeks. This may interest you: ZRX Boosts Coinbase Market: Will ZRX Price Rise 100 Times Soon?.

This move in the cryptocurrency market has been mirrored by the stock markets, which have also fallen significantly today as investors await the Federal Reserve’s decision on its upcoming interest rate policy. This week, the Federal Open Market Committee is expected to announce a rate hike of 75 basis points (0.75%), bringing overnight interest rates above 2% for the first time since the pre-pandemic era.

Bitcoin liquidations rose on the news as trading volumes remained very high.

And then ?

In recent weeks, Ethereum has been one of the most volatile large-cap tokens on the market. Therefore, today’s exceptional decline must be put into perspective. This may interest you: The first European ETF to be launched by Grayscale.

After all, this is a token that has grown significantly lately, in anticipation of the network’s imminent merger. So on lesser days like today, it makes sense to see higher selling interest emerge as investors take profits and book short-term gains.

Broad macroeconomic concerns seem to warrant a cautious approach by growth investors as risky assets are repriced. Some analysts have put forward the possibility of a prolonged bear market for stocks as an incentive for investors to avoid riskier asset classes such as cryptocurrencies. Whether or not such a protracted bear market is in sight is still debated among investors, leading to excessive volatility as price trends unfold.

What’s next?

The overall cryptocurrency market continues to hover just slightly above the psychologically important threshold of $1 trillion in market cap. As a result, crypto investors fear that traders will be incentivized to hit the sell button if we slide back into 12-digit territory. This may interest you: 2 good reasons to buy Ethereum now and 1 reason to wait. Greater volatility could become the norm in the coming weeks as investors push and pull this seemingly critical level.

It will also be interesting to see how the cryptocurrency market reacts to the Fed’s decision this week. Whether this rate hike is greeted with relief or pessimism, it is something that will interest many.

For long-term investors in these top cryptocurrencies, the coming days and weeks look exciting (for lack of a better word).

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Be vigilant and consult your financial advisor before making any investment decision. Mirror-Mag cannot be held responsible in case of bad investments. Before using any third-party service, do your own research.

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