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The crypto market dropped sharply during the opening up of the EU market. Top cryptocurrencies BitcoinEthereum prices fell nearly 2% in just a few hours, losing earlier gains.
Altcoins followed suit, bringing a market-wide correction in the crypto market ahead of a key week with the Fed rate hike decision and tech giants’ quarterly results.
Why has there been a sudden drop in the crypto market?
The traders expected a correction of the price of bitcoin, because the rally did not have a fall. Bitcoin price continued to increase and even went through its 200-dma, doing a 40% rally in January.
Moreover, investors remain cautious ahead of a busy week of corporate earnings and central bank meetings, headlined by expected rate hikes from the U.S. Federal Reserve, the European Central Bank, and the Bank of England.
According to CME FedWatch Tool, there’s a 97.9% probability of a 25 bps rate hike by the Fed during the FOMC meeting. However, a rate hike of 50 basis points is still on the table and Wall Street economists believe that investors must wait a bit longer for the Fed's pivot.
Meanwhile, the European Central Bank plans to deliver 50 bps interest rate hikes in February and March. Policymakers are exerting pressure to control inflation at a time when the risk of a global recession is increasing.
Also ReadJanet Yellen, Elon Musk Warns Severe Recession, Will Crypto Crash Again?
Bitcoin and Altcoins dropped out of the blue.
Bitcoin price is currently being negotiated at $23,259, after a 2% drop in a matter of hours. A minimum and a maximum of 24 hours is $23,166 and $23,919. BTC's price reached a maximum of $23,861 on Sunday.
The price of ether also fell by 2% to $1,592. High-end spare parts such as xrp, doge, matic, ada, and so on. Decreased by more than 3% over the last 24 hours.
Despite a decline in the US dollar index () to 101.68, the prices of cryptos have been corrected. As a result, it indicates that investors sold their crypto assets prior to the increase in federal bond yields.
Also ReadLegendary Trader Peter Brandt Predicts Next Move As Bitcoin Price Hits $23.5K
