The crypto market is experiencing a new dark period after satisfactory performance for the past few days. Bitcoin (BTC) and Ethereum (ETH) prices crashed further when the market opened on Monday. While Bitcoin fell below $19,000, Ethereum fell below $1,300.
Definitely, the turnarounds are not ready to stop on the crypto-currency market. At the weekly market open this Monday, September 19, the world’s top two cryptos fell sharply. Bitcoin Hits 2022 Low with a price under $19,000. On his side, Ethereum fell back below the price of $1,300.
This resulted in a general fall in the market which is reflected in the level of the total market capitalization. Indeed, the total crypto market valuation fell below $950 billion within 24 hours. Compared to its previous value, this represents a drop 6.4%.
This is a blow for investors who were just recovering from a long period of hibernation. The market in general has had a difficult year so far and everything seemed to be back to normal for several weeks. While several experts try to determine what would have caused this relapse, some point the finger at recent events in the market.
Ethereum price plunges again after merger
Investors were hoping for a quick move in Ethereum’s price after ‘The Merge’ was finalized. However, Vitalik Buterin’s network shift from a proof-of-work consensus to a proof-of-stake consensus has not yet borne the expected fruit.
Prior to the merger, Ethereum had seen a resurgence in its price which was stabilizing around $1,500. However, with the merger news, that price dropped below $1,300. If in the short term, the changes are not positive, it can be explained by a few reasons.
SEC Chairman Gary Gensler said that the merger could make Ether look like a security. This sparked a debate around the issue. In addition, concerns have arisen because of data centralization. In effect, an analysis of data from Santiment shows that more than 45% of transactions on the Ethereum network are processed by two wallets only. Moreover, after the merger, 82% of Ethereum blocks are relayed by flashbots according to analysts.
An ongoing Fed interest rate hike
Analysts believe that the global stock market will suffer losses in the coming days. The reason for this pessimism is that the US Federal Reserve has planned to raise interest rates at its next meeting. In the short term, the crypto market and other markets should suffer the consequences.
This decision has a very specific objective: to bring down the rate of inflation in the United States. This news does not please everyone as it could cause a recession.