The combined value of all digital assets in circulation decreased by more than $200 billion in the past week, leading to most coins recording double-digit losses in the time period – Bitcoin lost roughly 15% and revisited its June lows, while Ethereum lost over 24% and hit a two month low of roughly $1,330.
Bitcoin hit its lowest price point in over two months on Tuesday, with the world’s largest cryptocurrency breaking a multi-week long period of flat trading with a break towards the bottom. BTC/USD lost nearly 5% of its value in the last 24 hours and dropped to $18,578.
Bitcoin lost nearly 10% of its value in the last couple of days, having dropped from $21,750 on Friday to a six-week low of $19,550 today. The significant drop in BTC/USD is very likely linked to the remarks made by Federal Reserve Chair Jerome Powell at the end of last week.
The total cryptocurrency market cap increased by 7.5% in the last 24 hours, with investors taking yesterday’s 75 bps interest rate hike and today’s negative Q2 2022 gross domestic product (GDP) report in stride.
In their latest weekly report – aptly named Pressure Builds on Diamond Hands – Glassnode researchers examined past Bitcoin downtrends to determine whether “widespread capitulation” is near and – with Bitcoin trading more than 70% removed from its all-time high – the bottom has been reached.
During the weekend, the price of Bitcoin dropped below the $18,000 mark and hit a 19-month low of $17,700. Much like Bitcoin, Ethereum and other digital assets also plunged to their respective multi-month lows as the cryptocurrency market cap shrinked to $852 billion.
Yesterday’s cryptocurrency market bounce back was unfortunately short-lived as today a new bout of bearish activity sent the prices of digital assets deeper into a red zone. The roughly 10% drops in the value of Bitcoin and Ethereum comes at a time when exchange inflows reached the highest levels since 2018, signaling that crypto investors are liquidating their holdings at an expedited pace.
The cryptocurrency market has been in a state of gradual decline over the past couple of months. The rise in the interest rates and a generally conservative approach to investing has led to a considerable drop in the value of virtually all risk-off assets, from tech stocks to digital currencies.
The cryptocurrency market has been caught in a downward spiral of gradual price declines fueled by rising interest rates, growing inflation, and broader geopolitical uncertainty. Although several major digital assets surged by double-digits yesterday, the rally was apparently short-lived.