Cryptocurrencies Start the Week Down. What Can We Expect in the Coming Days
Ever since the start of this year, the crypto market has been going through an uncertain and difficult phase. Most cryptocurrencies have lost more than half of their overall value and have managed to cause severe losses to investors. The crash within the market caused the investors to sell their assets in a panic. However, cryptocurrencies losing their value can be traced back to the FED jacking up interest rates throughout this year.
The crypto market moved in correlation with the US stock market. Thus, fluctuations within the stock market had an impact on cryptocurrencies. However, the correlation seemed to weaken in recent weeks. For the longest possible time, it was actually believed that cryptocurrencies served as a hedge against inflation, but that was not exactly the case. Coupled with high interest rates and certain difficult macroeconomic factors, cryptocurrencies are experiencing a continuous loss of valuation.
What to Expect from Cryptocurrencies in the Near Future?
Just a few days ago, the FED pumped up interest rates yet again. However, there was no immediate impact on cryptocurrencies, but it was estimated to show up anytime soon. The crypto market already had a reputation for being extremely volatile. Also, it reacts swiftly to such global financial news. Nonetheless, at the start of this week, the crypto market shed its value as its overall market cap went down by over 2.50%.
Several cryptocurrencies including Bitcoin lost their previous week’s gains. Moreover, BNB, DOGE, and SOL were among the most significant losers in the market during this time. AVAX, ATOM, and FTT also lost majorly in the meantime.
It is still a matter of conjecture if cryptocurrencies would be able to regain their value and take a turn towards rising once again. However, if inflation rates are pushed down and macroeconomic factors ease-out, there is a chance that the prices of these cryptocurrencies might shoot back up. As of now, the uncertain market continues to ride on many ifs and buts situations.
Many experts believe that the situation in the crypto market could change for the best by the end of this year. There is still a possibility of a further increase in interest rates. In that case, cryptocurrencies can continue to fall. Therefore, the fundamental goal is to control the high interest rates and steer the global economy through this recession.