Technology

Why are major cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), and Dogecoin (DOGE) crashing today? – Mag Mirror

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What happened ?

Today’s crypto sell-off has thwarted much of the positive sentiment we’ve seen in the sector over the past few weeks. As of 12:30 pm EST, major cryptocurrencies Bitcoin (BTC 1.37%), Ethereum (ETH 3.88%) and Dogecoin (DOGE 2.24%) are down 5.1%, 9% respectively, 0 .7% and 6.8% in the last 24 hours. .

This dramatic shift in sentiment seems to be due to the dissipation of the hype around the upcoming Ethereum merger, which has provided a significant portion of the sector’s gains over the past few weeks. You might be interested: ZRX stimulates the market Coinbase: will the price of ZRX multiply by 100 soon?

This movement in the cryptocurrency market has been reflected in the stock markets, which have also declined significantly today as investors await the Federal Reserve’s decision on the upcoming interest rate policy. The Federal Open Market Committee is expected to announce a 75 basis point (0.75%) rate hike this week, pushing the federal funds overnight rate above 2% for the first time since the pre-pandemic era.

The news saw an increase in bitcoin liquidations as trading volumes remained very high.

So what ?

In recent weeks, Ethereum has been one of the most volatile large-cap tokens on the market. Therefore, its exceptional decline today needs to be put into perspective. You might be interested: the first European ETF launched by Grayscale.

After all, this is a token that has grown significantly in recent times in anticipation of the upcoming network merger. So on down days like today, it makes sense to see higher selling interest materialize as investors take profits and make short-term gains.

Widespread concerns about macroeconomic performance seem to require a cautious approach on the part of investors rising in connection with the revaluation of risky assets. Some analysts are talking about the possibility of a longer bear market in equities as an incentive for investors to avoid riskier asset classes like cryptocurrencies. Investors are still debating whether such an extended bear market is foreseen, leading to excessive volatility as prices unfold.

What’s next?

The overall crypto market continues to hover just above the psychologically important $1 trillion market cap threshold. As a result, crypto investors fear that traders will be incentivized to hit the sell button if we move back into 12-digit territory. This may interest you: 2 good reasons to buy Ethereum now and 1 reason to wait. Increased volatility could become the norm in the coming weeks as investors keep pushing this seemingly critical level.

It will also be interesting to see how the cryptocurrency market reacts to the Fed’s decision this week. Whether this rate hike is met with relief or pessimism, many will be interested to see.

For long-term investors in these leading cryptocurrencies, the next few days and weeks promise to be exciting (for lack of a better word).

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Be vigilant and consult your financial advisor before making any investment decision. Mirror-Mag cannot be held responsible for unsuccessful investments. Before using any third party service, you should do your own research.

Passionate about cryptocurrencies and DeFI, Thomas brings international news on the subject!

Thomas E.
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