Altcoins Turn Deep Red, Why Is Crypto Crashing Today
The crypto market turned red overnight and is facing major bearish sentiments. Bitcoin fell close to 2% in the last 24 hours while Ethereum fell by over 3%. BTC is currently trading at $19,100 while ETH is at $1,281. However, it is the rest of the crypto altcoins market which is facing a major crash.
Ripple’s XRP broke its strong rally and plummeted close to 7% in the last 24 hours. On the other hand, Cardano and Solana both continued their slide to the bottom. Cardano fell by 6% while Solana fell close to 4%. Despite strong fundamentals, Chainlink is also tanking due to unfavorable macroeconomic conditions. It is currently trading at $7.22 after falling another 4% in the last 24 hours.
Ethereum Classic continues to be one of the poorest performers in the crypto market. ETC was expected to be a major beneficiary of the Ethereum merge. However, ETC continues to disappoint its investors. It fell another 11% in the last 24 hours and is trading at $24.
Why Is Crypto Crashing Today
The crypto market is struggling due to the hawkish macroeconomic conditions created by the Federal Reserve. The crypto market is currently watchful of the Consumer Price Index which will be released on Thursday. The CPI is a strong indicator of inflation levels in the country. Last month, the released CPI was worse than the expected forecast. As a result, the crypto market faced a major bloodbath.
Similarly, the Producer Price Index will also be released this month. Key fed officials continue to reaffirm their hawkish stance against inflation. The CME Fed Watch tool currently shows the likelihood of a 75 bps interest rate hike. If the released CPI and PPI are worse-than-expected, the market can price in a mega hike of 100 bps. Last month, this phenomenon led to further sell-off in the crypto market.
Will Recession Be A Saving Grace
Fed officials continue to have a hawkish stance. However, concerns regarding the global financial instability are rising. The International Monetary Fund will release its Global Financial Stability report on Tuesday. Concerns about an impending recession may result in a pivot from the Fed.
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