Bitcoin, Ethereum, and Dogecoin drop as fears of inflation rebound

The US has done a lot to curb inflation. It was around 8% in 2022-2023 and has now been reduced to around 3.3% as of April 30, 2024. The target is rather aggressive, with the Federal Reserve looking to bring it under 2% by the end of 2024. However, the fear of inflation has started gripping the market again. This comes after the Federal Reserve refused to cut rates in the first six months of 2024.

The Fed still has room to make everyone happy, so the window for rate cuts hasn’t necessarily closed.

One sector that is being impacted the most is the crypto market. More specifically, flagship digital tokens like Bitcoin, Ethereum, and Dogecoin are taking severe hits because of such speculation. This is evident from the trend they have established in recent times. BTC is out of its consolidation phase but refuses to move beyond $70,000. ETH continues to rely on approval of its ETF applications for a surge. DOGE, as an exception, lacks sufficient enthusiasm for online trends.

More factors that are instilling fear in the crypto market are a lack of risk appetite and the global money supply. Investors and traders are unwilling to risk a major portion of their funds. As a result, they are not diverting significantly towards the crypto market. This has had a domino effect, kind of, leading to the issue of the global money supply.

This has affected liquidity in the crypto market. Within 24 hours, the market reported a $152 million liquidation drop. Long liquidation has accounted for 71%, led by Ethereum with $38.55 million. The futures market of Ethereum has declined by 2.26% as the Open Interest of Bitcoin took a hit of 0.45% in just a single day.

Analysts are optimistic about the segment, especially when it comes to Ethereum. They believe that the approval of its ETF products could revive traders’ and investors’ interest.

That said, sentiments on a broader level have also declined. For instance, the stock market dipped on Wednesday. The S&P 500 reported a fall of 0.74% to close the day at 5,266.95. The Nasdaq Composite closed at 16,920.58, indicating a decrease of 0.58%. The rise in Treasury yields is the reason for the fall on Wednesday. The 10-year Treasury note yield was trading at 4.62%.

BTC is currently at $67,952.27 at the time of writing this article.  This represents a 0.77% drop in the last 24 hours. ETH and DOGE are down by 2.61% and 4.99%, respectively, during the same time window at press time. A bull run is still predicted as the US progresses to curb inflation or as the surface settles for the upcoming November elections.

Scott Cook

Scott Cook got into crypto world since 2010. He has worked as a news writer for three years in some of the foremost publications. He recently joined our team as a crypto news writer. He regularly contributes latest happenings of crypto industry. In addition to that, he is very good at technical analysis.

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bitcoin
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ethereum
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tether
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bnb
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solana
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xrp
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dogecoin
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cardano
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