Ether (ETH) and Cardano (ADA) have both dropped nearly 9% in the last 24 hours, giving up a week’s worth of gains to become the major decliners among major cryptocurrencies. Despite the activation of the Bellatrix upgrade – the Ethereum network’s final “hard fork” before the Merge – on Tuesday, Ether fell.
Bitcoin fell 5.5% in early European hours, trading below $18,900. BNB and Solana’s SOL fell 5%, XRP fell 4%, and Polkadot’s DOT fell 7%. Futures contracts tracking major tokens saw $327 million in liquidations, while the total cryptocurrency market capitalization fell below $1 trillion for the first time since July.
Memecoin, Dogecoin, and Shiba Inu losses averaged 6%. Outside of the majors, Ethereum Classic’s ETC fell 16% after a double-digit rally on Tuesday, while Terra’s old Luna Classic tokens fell 20% after more than doubling in the previous week.
Concerns about aggressive US policy The dollar rose overnight as a result of the Federal Reserve’s monetary tightening, reaching a 24-year high against the Japanese yen and a lifetime high against the Indian rupee. The S&P 500 lost 0.4% and the Nasdaq 100 0.7% on Tuesday as tech stocks slid.
Arcane Research analysts warned of increased volatility in the coming days in a note released on Wednesday. The August Consumer Price Index will be released on September 13th, and the European Central Bank will make its interest rate decision on Thursday. The ECB is expected to raise rates by 75 basis points. A basis point is equal to one hundredth of a percentage point.
According to Chris Esparza, founder of decentralized finance (DeFi) protocol Vault Finance, the Fed’s impending tightening presented a “bad outlook” for bitcoin.
“Tightening generally reduces the printing of cash to prop up the economy as we had in the COVID-19 pandemic years,” Esparza explained. He told CoinDesk that Bitcoin investors should focus on the asset’s fundamentals rather than macroeconomic market indicators.
