Monday saw a selloff in cryptocurrencies gain momentum, with Bitcoin dropping to a six-month low and other digital token registering even greater losses.
During a six-day downward trend, bitcoin dropped as much as 6.6% and fell below $34K. Ethereum fell 7.6% and touched $2.2K, also its lowest level since July.
According to FTX exchange data, Solana’s SOL and Cardano’s ADA dropped 19% and 13% respectively across the crypto spectrum.
Recently, cryptocurrency has been subject to widespread selling pressure, as traders point to hawkish signals from the Federal Reserve and a selloff in technology stocks as causes for traders to steer clear of risky assets. Over 50% of Bitcoin’s value has been lost since its high in November.
The majority of commentators predict that the first increase in borrowing rates will take place in March, followed by three more at subsequent quarterly meetings, thereby adding more pressure on the Crypto market.
If the central bank disappoints market expectations by sticking to its December projection of three rate hikes in 2022, the ultra-hawkish expectations may allow for a relief rally later this week.
Market pundits don’t consider it a bad thing if volatility takes some air out of the more speculative parts of the market
In premarket trading, crypto-exposed stocks tumbled. Crypto-miners Marathon Digital Holdings Inc. and Riot Blockchain Inc. fell by similar amounts, while MicroStrategy Inc. slumped about 12%.