Bitcoin, Ethereum and other major coins crashed on Wednesday evening, as the global cryptocurrency market cap lost more than 6.4% to $1.2 trillion at press time.
| Bitcoin (CRYPTO: BTC) | -5.5% | -0.1% | $28,747.98 |
| Ethereum (CRYPTO: ETH) | -8.2% | -7.6% | $1,919.34 |
| Dogecoin (CRYPTO: DOGE) | -7.2% | -1% | $0.08 |
| TerraUSD (UST) | -30.112.6% | $0.09 |
| Kadena (KDA) | -22% | $2.30 |
| Helium (HNT) | -16.1% | $7.71 |
Why It Matters: Cryptocurrencies dropped sharply in line with stocks, which crashed on inflation worries and worse-than-expected retail earnings Wednesday.
The Dow closed more than 1,100 points lower or 3.6% to 31,490.07 on Wednesday. The S&P 500 and the Nasdaq ended the day 4% and 4.7% lower respectively.
The yield on the benchmark 10-year bond slid below the 3% mark on weak U.S. housing starts number, a harbinger of weakening growth.
GlobalBlock analyst Marcus Sotiriou said it is unclear what the rate hikes will look like after July. “The market believes there is a 4.5% chance of no more 50 basis point hikes after July and a 36% chance of 1 more 50 basis point hike after July,” said Sotiriou in a note.
Sotiriou said he believes that inflation will begin to inflect down in August, September and October.
There are doubts whether the U.S. Federal Reserve would be able to deliver a “soft landing” as it fights inflation, said Edward Moya, a senior market analyst at OANDA.
“Bitcoin was dragged down alongside most risky assets as Wall Street suffered the worst loss in almost two years. Bitcoin remains a risky asset and vulnerable to further pain if the de-risking continues tomorrow,” said Moya, in an emailed note seen by Benzinga.
Cryptocurrency markets face systemic issues with stablecoins beyond the macro fundamentals. Glassnode tweeted that aggregate stablecoin supplies have dropped by a total of $8.4 billion over the last month, the largest such downfall in history.
“This reflects a net capital outflow from the space,” said the on-chain analysis firm.
Aggregate stablecoin supplies have declined by a total of $8.4B over the last month, the largest in history.This reflects a net capital outflow from the space.
Last week, $USDC expanded by $2.64B, whilst $DAI contracted by over 24%, as debt positions were closed or liquidated. pic.twitter.com/xMrUy4gxkU
— glassnode (@glassnode) May 18, 2022
Probably some momentum towards $29.7K possible.Question whether we can hold $29.3K for continuation, but overall I'm still expecting a HL to be happening on #Bitcoin in which we continue towards $32.8K/$34K.
— Michaël van de Poppe (@CryptoMichNL) May 18, 2022
Transaction history shows that 2.24 million addresses bought 26.33 million $ETH at $2,300.HOODAny signs of weakness might encourage these addresses to sell, which could see #Ethereum drop to its most important support at $700 where 13.25 million addresses hold 13.1 million #ETH. pic.twitter.com/5SE67MhHwh
— Ali Martinez (@ali_charts) May 18, 2022
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Read at Benzinga