Investors are abandoning the cryptocurrency market once more, and this trend is likely to continue for some time. It’s similar to a song’s chorus.
The cryptocurrency market is once again in decline. For the fifth session in a row, prices begin to fall. In terms of market value, we are once again under a trillion dollars. To be more specific, at the time of the last check, the market was worth $997 billion, down 1.3% in 24 hours.
This market has thus lost more than $2.1 trillion since its all-time high of more than $3 trillion in November of last year.
Bitcoin has lost 8% of its value in the last seven days and represents the current bearish trend.
The king of cryptocurrencies fell below $20,000, a level it had not reached since July 14. At the time of writing, Bitcoin was worth $19,871.15. It is down 71.2% from its all-time high of $69,044.77 set on November 10 during the height of crypto mania.
In recent weeks, the most popular cryptocurrencies had stabilized slightly above $20,000 and even managed to reach the symbolic threshold of $25,000 on August 15 before retreating again on concerns about the Federal Reserve’s monetary tightening.
ASSETS AT RISK
The equation is simple: cryptocurrencies, which are the public face of the crypto industry, are viewed as risky assets by investors in the same way that stock markets and, in particular, technology groups are.
When things go wrong, risky assets are often the first to pay the price. In this case, investors are concerned that the central bank’s aggressive rate hike will result in a hard landing for the economy, also known as a recession. As a result, they liquidate or avoid assets deemed risky.
During his speech Friday at the traditional Fed symposium in Jackson Hole, Wyoming, Fed Chair Jerome Powell did not reassure them. According to Powell, the economy will likely require higher rates for a longer period of time in order to contain the fastest domestic inflation in forty years.
Powell added that higher rates would likely result in weaker near-term growth and softer labor market conditions, describing it as the “unfortunate costs of reducing inflation.” “We must keep at it until the job is finished,” Powell said of the Fed’s fight against inflation. “History shows that the employment costs of lowering inflation are likely to rise as time passes.”
Powell also stated that another “unusually large” rate hike in September may be appropriate, but that no decision has been made and that the size of the move “will depend on the totality of the incoming data and the evolving outlook.”
Powell’s speech has an impact on alt coins such as ether, which is on the rise. In the last 24 hours, Ether, the native token of the popular Ethereum platform, has dropped 3% to $1,452.24. Nonetheless, the Merge, the well-known Ethereum software update that will be implemented in two stages in September, is regarded as a game changer for the crypto industry.
The Merge is intended to make blockchain more accessible to a wider range of people by lowering transaction fees and attracting environmentally conscious investors due to the introduction of a new, less energy-intensive transaction validation mechanism known as proof-of-sate. Ether has fallen 70.1% since its all-time high of $4,878.26 on November 10.