After fears of a recession in developed economies like the United States and Europe were triggered, the trading of cryptocurrencies has been erratic, mirroring the weak performance of global stocks.
Everyone involved in the cryptocurrency industry, from investors to traders to developers, has felt the sting of the current bear market. From their all-time high in November 2021, the prices of many of the most popular cryptocurrencies have since dropped by 70% or more. Many people have seen their life savings evaporate, and several crypto companies have failed as a direct result. The light at the end of the tunnel is not yet out, but it will be soon.
It’s important to remember that the cryptocurrency market goes through cycles. That means it tends to pick itself up after hitting rock bottom. Bitcoin, Ethereum, and other cryptocurrencies often recover from dips in value by spiking to new all-time highs. Considering the current market situation, this may seem unlikely. But this trend has been seen before, and many analysts predict it will emerge again in the coming months.
Fed’s Raise Interest Rates
The strong strategy used by the Federal Reserve of the United States to manage inflation at the expense of economic development further depressed the mood. The Fed raised the interest rate by an additional 75 basis points. The major markets on Wall Street and in Europe had significant declines during the last week, while the price of energy ended the week on a lower note and bond rates reached multiyear highs.
The value of the US dollar increased beyond the 111 thresholds when measured against a collection of currencies, which makes the value of cryptocurrencies when measured against the USD susceptible. At this time, there is a sharp decline in the volume of trading activity associated with cryptocurrencies.
Market Showing Some Signs of a Rebound
At the time of this writing, the total volume of the cryptocurrency market, as measured by CoinMarketCap, was $91.4 billion, representing a daily increase of 17.75%.
In the meanwhile, the overall volume in DeFi is now at $4.97 billion, which accounts for 5.73% of the entire 24-hour volume in the cryptocurrency market. At this time, the volume of all stablecoins is $84.49 billion, which represents 92.41% of the total 24-hour volume of the cryptocurrency market.
Today, Ethereum is the cryptocurrency that is most actively being traded, followed by PancakeSwap and XRP. The cryptocurrency market leader Bitcoin is currently selling at $19,055, an increase of 0.66% from its previous price. Its total market capitalization is close to $366 billion. The dominance of the digital coin presently sits at approximately 38.95%, which is an increase of 0.12% over the course of the day.
Ethereum Shines
In the meantime, Ethereum, the second most valuable cryptocurrency, is trading close to $1,318 and is now up by 1.04%. It is estimated that its market valuation is approximately 161 billion dollars.
Proof-of-work has been formally deprecated, and energy consumption has been reduced by around 99.95% as a result of Ethereum’s recent implementation of the most-anticipated Merge, which resulted in a changeover of proof-of-stake consensus. According to information provided by Coinglass, Ethereum has generated more than 759 million dollars in sales since September 15.
Nevertheless, throughout the course of the past seven trading days, the prices of Bitcoin and Ethereum have fallen by approximately 5% and 9%, respectively.
Past 24-Hour Action
In the past twenty-four hours, the cryptocurrency with the best performance was Chainlink, which gained 5.5%, followed by Reserve Rights, which increased by 8.83%. There was a jump of approximately 5% in value for Chiliz, eCash, and Algorand.
On the other side, Terra Classic (LUNC) claimed the lead in the list of laggards by falling by more than 7%. This was followed by XDC Network, which lost over 5%, Dogecoin and Stellar, which each fell more than 3%. The decrease ranged between 2% and 3% for Celsius, Synthetix, Helium, Nexo, and Axie Infinity.
Terra Tokens under Pressure over CEO’s Arrest Warrant
There is a lot of pressure being put on Terra tokens since the CEO of Terraform Labs, Do Kwon, is now facing numerous jurisdictions. The office of the prosecutor for the Seoul Southern District has issued a warrant for Kwon’s arrest. Kwon is the inventor of TerraUSD, an algorithmic stablecoin, as well as Luna, a sister token.
Together, these two cryptocurrencies are blamed for the loss of reportedly $60 billion in the cryptocurrency market. Although Kwon’s whereabouts are unknown, the co-founder of Terra tokens has disputed rumors that he is “on the run” from federal authorities. These rumors have been circulating for some time.
In its most recent policy statement, the Federal Reserve of the United States emphasized the fact that the Committee is very sensitive when it concerns matter pertaining to inflation.
In addition, the FOMC stated that in order to achieve these goals, the Committee decided to raise the target range for the federal funds rate to about of 3%, and the Committee thinks that additional increases in the target range will be appropriate.
In addition, the Committee will proceed with the reduction of its holdings of Treasury securities and agency debt, in addition to agency mortgage-backed assets, as outlined in the Plans for Reducing the Size of the Federal Reserve’s Balance Sheet document that was published in May. The FOMC is dedicated to achieving its goal of 2% inflation as quickly as possible.
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