The cryptocurrency market tries to catch its breath after days of endless crashes.
The cryptocurrency market needs a break.
After days of continuous tumble, the prices of digital currencies seem to want to take a break, even catch their breath.
The Federal Reserve gave investors some respite by raising its rates very sharply on June 15, the biggest increase in 28 years. The central bank raised its key rates by three-quarters of a percentage point, or 0.75 percentage point, the biggest increase since 1994, in an attempt to control higher-than-expected inflation.
With this third increase in a row, these rates are now in a range of between 1.5 and 1.75%. The Fed also announced that it expects inflation to be 5.2% this year, against 4.3% projected in March, and will therefore make further hikes at its next meetings in 2022.
At the same time, it anticipates weaker economic growth than expected this year in the United States, at 1.7%, against 2.8% previously. It also expects the unemployment rate to be higher than expected at 3.7%, against 3.5% previously.
Investors are still in the process of digesting all these announcements, which had the first effect of making the stock market rebound and more particularly the Nasdaq index. Cryptocurrencies and technology stocks that are the majority in the Nasdaq have been moving in tandem for several months as investors consider them risky assets.
Celsius Remains Silent on Bankruptcy Rumors
The Fed’s impact on the crypto market led to a slight rebound in prices. The Bitcoin which was heading towards $20,000 has thus managed to rise somewhat. The king of cryptocurrencies is currently worth $22,154.80 as of time of writing, according to data firm CoinGecko. Bitcoin was up 5.2% in the last 24 hours.
But given the high volatility that characterizes the crypto market, it would not be surprising if everything went down again in the next few hours.
Ether, the native token of the Ethereum platform, regained 7.4% to $1,201.65 Ether is the largest cryptocurrency by market value.
Coins from decentralized finance, or DeFi, platforms, such as Solana, Polkadot, Cardano and Avalanche, were the tokens that bounced the strongest. Their platforms are considered very promising as they are very serious rivals to traditional finance because they offer the same services via what is known as smart contracts.
They gained between 13% and 22%.
Finally, meme coins Dogecoin and Shiba Inu gained 15.4% and 9.8% respectively.
Fear, uncertainty, and doubt, or FUD as the industry says, dominate the crypto market. In addition to fears related to the economy, investors are wondering who will be the next domino to fall after two resounding scandals in a month.
Crypto lender Celsius Network still says nothing about the rumors evoking its probable bankruptcy after suddenly freezing fund withdrawals from its platform on June 12.
“This is a difficult moment; your patience and support mean the world to us,” CEO Alex Mashinsky wrote on Twitter on June 15.
In May, it was sister coins UST and Luna that suddenly crashed causing at least $55 billion to disappear.