Bitcoin and Co.: US interest rate hike shakes up the crypto market

The crypto market still cannot recover sustainably. Again and again, new bad news from the classic financial market causes new sell-offs on the global stock markets. Due to the persistently high correlation with the Nasdaq100 technology index, Bitcoin and Co. are still unable to free themselves from the stranglehold of the classic market in the long term. The monetary policy of the US Federal Reserve, which aims to get inflation under control by any means necessary, continues to have a heavy impact on all markets.

Central banks set the pace

The fact that the Fed raised the key interest rate again by 75 basis points to 3.25 percent and at the same time confirmed its interest rate target of 4.6 percent for the coming year again caused a broad-based correction in all asset classes on Wednesday evening. As a result, the US Dollar Index (DXY) rose again to a fresh annual high – absolute poison for the crypto market. The fact that the US Federal Reserve is continuing to push so-called “quantative tightening” and that around USD 60 billion will be withdrawn from the market every month is not good news for risky investment sectors.

The hype surrounding The Merge seems to have subsided in the short term

The “merge” at Ethereum (ETH) can also not provide any bullish impulses, at least in the short term. Rather, investors appear to have taken profits across the board. The hype surrounding Proof-of-Work (POW)-based cryptocurrencies such as Ethereum Classic (ETC) and Ravencoin (RVN) also seems to have evaporated again. Both cryptocurrencies, still among the strongest price performers in the previous weeks, were among the biggest losers in the last seven trading days. One of the few bright spots this week is Ripple (XRP) price action. The price of the fifth largest cryptocurrency escapes the market weakness and bucks the trend by 30 percent. On the other hand, the Vasil upgrade that started today at Cardano does not seem to have a positive effect on the ADA price. The bearish market environment also sent the total market capitalization down to a new 50-day low of $878 billion.

Price developments of the top 10 altcoins

• A look at the price development of the top 10 altcoins paints a bearish picture. With the exception of Ripple, all other major cryptocurrencies lose value in a weekly comparison, some significantly.
• The long list of losers is led by Ethereum (ETH) with a 22 percent price drop.
• Shiba Inu (SHIB) with 13 percent and Polkadot (DOT) with a 12 percent price decline also corrected double-digit values.
• On the other hand, Solana (SOL) and Cardano (ADA), with a price drop of a good six percent, have a similarly high discount as the key crypto currency Bitcoin.
• Dogecoin (DOGE) and Tron (TRX), which has climbed back into the top 10, are doing relatively well, each with a value correction of only around three percent.

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Stability of the top 10

• Despite the continued strength of the US dollar and global interest rate adjustments, Bitcoin can still hold its own relatively well.
• Since the BTC dominance is currently between 40 and 41 percent trying to bottom out, Bitcoin should outperform the Altcoin sector if its market power increases again in the coming weeks.
• The low trading volume of the key crypto currency is still more problematic here. Any price increases do not show any increase in sales, which makes a liberation even more difficult.

A lot depends on the performance of the classic financial market

• If the classic stock indices Nasdaq100 and S&P500 continue to fall in the coming days, this will not leave the crypto market untouched.
• If new annual lows are formed in the US stock markets, Bitcoin can also be expected to fall below its previous low in 2022.
• Bitcoin must try not to give up the area around USD 18,000. On the upside, the bulls must first recapture the USD 20,000 mark in order to target the resistance at USD 20,800 in the next step.
• Looking at the ranking of the top 10 altcoins, there is a change of place. Polygon (MATIC) has to make way for Tron (TRX) after a 15 percent setback, who has now climbed back to rank 10.

Winners and losers of the week

• The renewed price weakness of Bitcoin and especially the second largest cryptocurrency Ethereum has recently had a significantly negative effect on the price development of the top 100 altcoins.
• Only 15 of the 100 largest cryptocurrencies show a price increase in a weekly comparison.
• Ripple tops the short list of outperformers with a 30 percent price increase, followed by the soccer token Chiliz (CHZ) with 27 percent.
• Algorand (ALGO) can also increase in double digits with a 20 percent increase in value. Both Chiliz and Algorand are benefiting from the growing interest in soccer NFTs just weeks before the start of the soccer World Cup in Qatar.
• Apecoin (APE) is also currently benefiting from the introduction of staking and is gaining 14 percent.

After the merger, the sale started

• The long list of weekly losers is led by Ravencoin with a 44 percent price drop, followed by Ethereum Classic with 28 percent.
• These two POW coins are followed by two Ethereum staking providers, Rocket Pool (RPL) and Lido Staked Ether (LDO). However, this price drop should not be surprising in view of the Ethereum price setback.
• Overall, around 40 of the 85 price losers have lost double-digit values ​​in the last seven trading days.

Disclaimer: The price estimates presented on this page do not represent buy or sell recommendations. They are merely an assessment by the analyst.

The chart images were created using TradingView created.

USD/EUR exchange rate at the time of going to press: EUR 1.00.