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Crypto markets on freefall, BTC below $25,000! When is recovery expected?

Crypto markets on freefall, BTC below $25,000! When is recovery expected?

Global cryptocurrency market cap slips to $1 trillion. The market cap was at $3 trillion 6 months ago    

Business Today Desk
Business Today Desk
  • Updated Jun 17, 2022 11:23 PM IST
Crypto markets on freefall, BTC below $25,000! When is recovery expected? Crypto markets on freefall, BTC below $25,000! When is recovery expected?

Cryptocurrency markets are on a freefall. As per data from CoinMarketCap, the global crypto market cap has dropped 8.05 per cent over last 24 hours to $1.04 trillion as of 8:00 a.m. IST today.

Bitcoin is currently trading at $25,811, down 8.76%. It fell below $25,000 earlier in the day, which is the first time it fell so low after December 2020.

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Ethereum has also shown a significant slump, falling 10.14 per cent to $1,368. The BNB token plunged 9.86 per cent.

Solana fell by a whopping 11.93 per cent. The ADA token fell 12.04 per cent. Memecoin Doge fell by 9.81 per cent.

Highlighting the reasons behind this crash, the CoinDCX reserach team told Business Today, “Crypto spent much of the weekend in the reds, following Friday’s CPI report that showed inflation rising. Crypto investors were largely expecting the U.S. central bank to boost rates a half percentage point later this week in a bid to quell inflation, leading to a major “risk-off” sentiment in the markets.”

Speaking about what to expect in the future, they said, “Going into 2023, we expect major central banks to continue their trajectory of quantitative tightening and policy rate hikes — effectively limiting any significant upside unless we see more convincing trends in economic recovery.”

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Sharat Chandra, vice president of Research and Strategy at EarthID also reasoned that the CPI report triggered major sell-off in the crypto markets. Chandra told Business Today, “The Consumer Price Index report released by the U.S Bureau of Labor Statistics released last Friday has reported 8.6 per cent inflation, signalling that inflation will be around for a while. The US monetary supply has ballooned to 18 per cent per cent, and the Fed is expected to undertake more quantitative tightening to tame inflation which may exacerbate market conditions.”

He further said, “High inflation figures have led to a decline in both equity and crypto markets. Investors have veered away from riskier assets.”

Speaking about cryptocurrency tokens, in particular, he said, “During bear markets, altcoins have historically underperformed than BTC. The current rout in altcoin prices reflects the prevailing bearish sentiment in the markets.”

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When asked what to expect in the future, Chandra said, “Fragility in the markets will fuel more uncertainty aggravating investor wariness.”

Shivam Thakral, CEO of BuyUcoin told Business Today, "The rising food, gas, and energy prices are putting tremendous pressure on the crypto market as Bitcoin and Ether have witnessed double-digit losses in the past 24 hours. Ether is at its lowest point this year and is currently below the $1400 mark. Solana has fallen by almost 30% and is hovering around the $29 mark."

He further said, "The market is expected to remain choppy in the coming weeks and countries around the globe continue to report high inflation numbers."

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Published on: Jun 13, 2022 11:15 AM IST
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