Since January 21, the crypto market has been caught up in a new wave of sell-offs, hitting Bitcoin from $41,110 tumble to $35,440 in a matter of hours. On January 22, BTC reach its new bottom at 34,008 USD, the lowest in the half-past year.
Ethereum dropped by 10.06 percent to $2,270 on early Monday. The second-largest cryptocurrency has fallen heavily since early November when it sat above $4,800. It’s declined by nearly 41 percent in 2022 alone.
It was a similar situation among other largest cryptocurrencies, with each experiencing major drops over 24 hours:
- Solana – down 19.58 percent
- Cardano – down 12.59 percent
- Terra – down 12.03 percent
- Binance Coin – down 10.16 percent
- XRP – down 7.96 percent
- Dogecoin – down 8.27 percent
The negative information calling for the cryptocurrency market, including the Central Bank of Russia proposing to ban cryptocurrencies, the Crypto.com exchange being hacked, the US Securities and Exchange Commission putting regulatory pressure on the crypto exchanges, are considered the main reason for the whole crypto market tumble.
Alternatively, the sudden decline also comes from the fact that US stock market is also in a downtrend after Fed’s announcement to raise interest rates as a solution to deal with inflation. According to CME’s FedWatch Tool, the market is pricing an 85 percent probability of the Fed boosting rates by 25 basis points, with a 5 percent probability of a 50 basis point bump. The new has effected strongly on Investors’ decision to keep investing in crypto or not.
Since Bitcoin’s price reached its all-time high at $68,990.90 in early November, the cryptocurrency’s value has steadily weakened. Nevertheless, Bitcoin remains the most valuable cryptocurrency by total market capitalization.