Bitcoin, ether and other cryptocurrencies are in the “red zone” due to the tightening of Chinese regulators in relation to cryptocurrencies and statements by the Fed about the increase in interest rates on loans.
Bitcoin, ether and other cryptocurrencies are in the “red zone” due to the tightening of Chinese regulators in relation to cryptoassets and statements by the US Federal Reserve about an increase in interest rates on loans.
Yesterday, June 21, the price of bitcoin fell sharply down to $ 31,710, falling by about 10%, while last week the rate of the first cryptocurrency fell by 8.7%. Bitcoin later bounced back to $ 33,200. As for Ether, it dropped to $ 1,891, hitting its lowest level since May 23rd.
Other leading cryptocurrencies such as XRP, ADA and DOT have also declined from 5% to 10%. Cryptocurrency meme Dogecoin joined the ranks of crypto assets going down: on June 20, the DOGE rate was $ 0.28, and yesterday it fell to $ 0.19862. Note that the capitalization of the cryptocurrency market fell to $ 1.32 trillion, although in mid-April it was $ 2.5 trillion.
Such a pessimistic market sentiment is largely due to the tough actions of Chinese regulators in relation to cryptocurrencies. The bearish sentiment has intensified after the recent ban by the Central Bank of China to provide banking services to cryptocurrency traders. Founder and CEO of Digital Currency Group Barry Silbert wrote on Twitter that the cryptocurrency market is facing a tough week. He recently stated that almost all cryptocurrencies are overvalued by 99%.
Founder and CEO of Vailshire Capital Management Jeffrey Ross suggestedthat bitcoin will be in a “weakened” state for one to three weeks. Given that the Chinese government is starting to harass local miners, many of them may start selling their bitcoins. Nonetheless, the macroeconomic outlook for cryptocurrencies remains optimistic, Ross said.
Perhaps the fall in the cryptocurrency market was influenced by the statement of the US Federal Reserve (FRS) regarding interest rates and inflation. The Fed said last week that it could raise base lending rates by the end of 2023, rather than 2024, as originally planned, to contain inflation.
Later, one of the Fed officials said that the regulator could raise rates by 2022. Due to such aggressive policy of the Fed, not only bitcoin fell, but also gold, as well as major stock indices on Wall Street. Meanwhile, the US dollar rose to a two-month high, signaling renewed investor interest in cash.
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