Cryptocurrencies and related assets fell on Tuesday and Wednesday morning, following The US inflation report for August, which showed that prices rose more than expected.
The cryptocurrency market plunged below a trillion dollars with a sharp decline recorded by the main cryptocurrency “Bitcoin”.
The inflation report gave the impression in the markets that the Fed is likely to raise interest rates by another 0.75% next week, which led to a sharp decline in the stock markets as well, and caused both the EUR and GBP to fall once morest the US dollar.
Bitcoin fell to critical levels just above $20,000, posting a loss of regarding 9% following a severe sell-off following expectations of a further rise in interest rates on the US dollar.
The losses of “Bitcoin” outperformed the “S&P 500” index, which suffered a loss of 4.3%, and the Nasdaq, which fell by more than 5%.
The total market capitalization of all crypto assets fell below $1 trillion once more.
The total market value of the cryptocurrency market fell on Tuesday by nearly 7% to $998 billion from $1.07 trillion, CoinMarketCap announced in a report seen by Al Arabiya.net.
The losses confirm that cryptocurrency fortunes are still largely tied to the central bank’s moves.
“Hopes of a soft landing, the end of the Fed’s hiking cycle, and a resilient consumer are fading…so in the short term, cryptocurrencies will be subject to more selling pressure,” senior market analyst Edward Moya said in a press statement.
In just four hours, more than $329 million of bitcoin trades were liquidated in the derivatives market.
According to cryptocurrency market watcher Nomex, cryptocurrency trading volumes on all exchanges increased by 62% to $739 billion over the past week, with dollar trading activity up 20% to $134 billion over the past 24 hours.
