- Top assets lost value this week, with ADA shedding 22% and market leader BTC plunging to new lows not recorded in months.
- The wider market was hit with deep losses wiping off $40 billion from the total market cap in 24 hours.
- Observers say the market had a slow adverse reaction to the Fed’s uncertain stance on interest rate hike before the full impact on Thursday.
Bitcoin (BTC) dipped below $25,000 for the first time in three months after the Feds signalled more interest rate hikes could be implemented.
The digital asset market was a sea of red as many coins posted weekly losses. Leading the losses in the top 20 by market capitalization was Polygon (MATIC), which plunged 24.1% and 8% in the past 24 hours. Solana (SOL) recorded a loss of 22.8% to trade at $14.54.
The past seven days have seen Cardano (ADA) lose slight gains it picked up this month. The community dubbed ETH Killer shed 22% of its value this week and 7% over the past 24 hours. XRP also saw a price correction after its community went into a frenzy following the revelation of the Hinman documents. XRP exchanges hands at $0.475 after losing 5.44% in the past week.
Other altcoins posted huge losses, including Polkadot (DOT), BNB, Avalanche (AVAX) and Shiba Inu (SHIB), which recorded losses of 13.96%, 12.4%, 19.4%, and 17%, respectively. BTC bulls were left stunned after the asset dropped below the $25,000 mark for the first time in three months. At press time, BTC trades at $24,950, with several on-chain metrics pointing upwards for the asset.
Feds keep market on edge
At the release of the recent Consumer Protection Index (CPI), the entire market anticipated a renewed push for most assets as many predicted the Feds would end the 14-month hike in interest rates. Although interest rates were maintained after positive inflation data, the Feds noted that rates could still go up towards the end of the year.
A rate hike is detrimental to the market as it blunts investor excitement leading to a departure from risky assets. According to Josh Gilbert, an eToro market analyst.
“Much of the positivity we’ve seen from risk assets this year, including Bitcoin, is built on the expectation that inflation will fall and interest rates will peak, and then begin to be cut. Inflation is moving in the right direction but the comments from Jerome Powell signify that rates could stay higher for longer, which would put Bitcoin on the back foot,” he explained.
The stock market also reacted similarly to cryptocurrencies following comments from the Feds as both the S&P 500 and Nasdaq dropped points.