The bellwether crypto was down 7.8% early Monday morning (05:30 am ET) and trading around $18,430 across major exchanges as shown by CoinGecko data.
At current levels, Bitcoin is sitting below the previous cycle high, with negative sentiment likely to aid the bearish push for a lower target. (Bitcoin fell to lows of $17,600 on 18 June 2022 following a massive bear market sell-off catalysed by the collapse of Terra and LUNA and implosions for several crypto companies.
Crypto analyst Michael van de Poppe points to Bitcoin’s local low but thinks a lot more could happen ahead of the FOMC meeting this week.
BTC/USD daily chart showing Monday’s decline. Source: TradingView
ETH dips, crypto down $70 billion ahead of Fed, BoE rate hikes
The rest of the crypto market is also red, with Ethereum (ETH) shedding more than 10% in the past 24 hours.
As Invezz reported last week, Ethereum completed its historic transition from proof-of-work consensus to proof-of-stake consensus mechanism – the Merge. However, the bullish effect of the event appears to either already have been priced in pre-Merge or will be felt long term. For now, Ether is struggling with downside pressure just under $1,300.
Again, van de Poppe thinks the Fed rate hike could have an impact on the price of Ether. He said in a tweet on Monday:
“Ethereum is looking at weakness here, as it lost an upwards trending structure. Expecting a response from the region between $1,200-1,300. Not sure whether we’ll get a bounce towards $1,425 as FED on Wednesday is most important as a decider of a trend.”
The past 24 hours have also seen double-digit losses for other major altcoins, including Cardano, Polkadot, XRP, and Polygon. Overall, losses across crypto have the global crypto market cap down well over $70 billion, currently down 7.3% to about $943 billion.
Losses for crypto come as the broader risk asset market frets over tighter central bank monetary conditions. This week, the US Federal Reserve is set to unleash another interest rate hike – it could even be a 100 basis point hike. Elsewhere, higher rates are also expected from the Bank of England and other central banks (here is our latest article on the three key rate hikes this week).
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