By ShahZaib Ahmed (Oman)
Trading pause among leading global cryptocurrency lenders and prospects of aggressive interest rates hike continue to rattle digital currencies.
- Bitcoin price lost more than 16% over the past day.
- Investors indulge in selling, citing possible aggressive rate surges ahead.
- Paused trading by crypto lender Celsius fueled concern about the potential to accomplish its commitments.
Bitcoin (BTC) remains in freefall, 16% down within the previous 24 hours. While publishing this blog, the world’s largest crypto by value traded at $22,187. That had Bitcoin traversing price levels never witnessed since December 2020.
The latest crash dragged BTC 53% lower this year and 68% down since its ATH of November 10. The overall crypto market capitalization reflects the downbeat mood in the crypto world. This metric lost the trillion-mark, changing hands near $933 Billion, following a 9.96% drop over the past day.
Why Is BTC Price Crashing?
Two factors contribute to Bitcoin’s downside pressure. The leading driver seems to be the more-than-expected inflation numbers by the U.S on Friday. Meanwhile, the largest economy globally sees inflation escalating at the quickest pace in 40 years. May saw the number at 8.6%, up from April’s 8.3%. Such readings canceled the hopes of inflation having peaked. Moreover, it amplified worries that the Fed will resort to aggressive tightening.
Also read:The U.S Fed Reserve will meet this Wednesday, and market players expect another 0.50% rate increase. However, the latest inflation numbers had analysts predicting a possible 0.75% rate increase. Such mode had risk assets, including high-growth tech stocks, witnessing renewed selling momentum. Nasdaq ended yesterday 4.7% down, whereas S&P/ASX (ASX: XTX) sees 6.7% loss.
Cryptocurrencies have tracked riskier assets throughout the year, and the ongoing sell-off isn’t an exception. Bitcoin and most large-cap cryptos hover deep in red following massive drops.
Another Thing Pressuring Crypto Markets
News about the leading cryptocurrency lender Celsius Network pausing trading during the weekend added downside strength to the crypto world. Bloomberg reports highlighted speculations that Celsius could fail to meet promises about high yield returns for products.
While publishing this blog, Celsius (CEL) traded for 27 U.S cents, 28% down within the past day. Meanwhile, CEL lost 60% since last Friday.
Valkyrie Investments co-founder Steven McClurg cautioned about more losses in the market. He stated that the market lacks fundamentals to back recovery and price stabilization. Things will likely worsen before getting better.
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