Why is the crypto market crashing today? Bitcoin falls 6%, Ethereum falls 8%

At the time of writing, on CoinMarketCap, the global crypto market cap of $914.50 billion was down 5.56% in the last day. However, there is an increase in total crypto market volume by 66.3% to $81.92 billion in the last 24 hours.

Meanwhile, the total volume in DeFi is currently $5.84 billion — 7.13% of the total 24-hour volume of the crypto market. The volume of all stablecoins is now $74.80 billion — which is 91.30% of the total 24-hour volume of the crypto market.

Bitcoin traded near $18,765.08 down 6.04%, while Ethereum traded at $1,314 plunging 8.44%. Other major cryptocurrencies such as BNB, XRP, Cardano, Solana and Dogecoin fell between 4-8%.

Bitcoin’s dominance was currently at 39.34% down 0.19% on the day.

Over the past seven days, Bitcoin and Ethereum have lost nearly 16% and 25%.

Among the winners in the crypto market are — Helium up by 4%, Terra ClassicUSD and Neutrino by more than 1% each. On the top underperformer list was — Ethereum Classic falling almost 13%, followed by Kusama, Curve DAO Token, EOS, Celsius and Ravencoin plunging between almost 11-12%.

Rajagopal Menon, Vice President, WazirX, speaking about the performance of the crypto market, said: “The Fed has been raising interest rates aggressively to tame inflation since its meetings in March this year. More than expected August CPI inflation data from the US has eased fears that interest rate hikes will continue to prevail globally. The US Dollar Index DXY has undergone another rally this week and is now approaching 110. This news has affected several investment markets such as stocks and cryptocurrencies.”

Menon said, “after the successful completion of the merger, ETH prices fell on the ‘sell on the news’ phenomenon; this was followed by a decline in the prices of other cryptos. Since all the excitement surrounding the merger has subsided. futures traders who bought ETH in anticipation of positive momentum and to get the forked tokens have sold their positions after the event. This has led to a significant price drop.”

Meanwhile, Edul Patel, CEO and Co-Founder of Mudrex – A Global Crypto Investing Platform said, “The second largest cryptocurrency, Ethereum, has declined by 24% in the last week. The decline can be attributed to the soaring inflation, fears of recession and anxiety around The Federal Open Market Committee’s September 21 meeting over the next rate hike.”

The US Federal Reserve’s monetary policy will begin from September 20-21. Inflation in the US was higher than expected at 8.3% in August 2022.

Last week Ethereum finally upgraded to Merge. The new upgrade has completed Ethereum’s transition to proof-of-stake consensus, officially abolished proof-of-work, and reduced energy consumption by ~99.95%. Many had expected the merger’s launch to stimulate the crypto market, but experts believe the upgrade came at the wrong time when markets are not strong.

Amanjot Malhotra, Country Head – India, Bitay said: “The crypto downturn in the market is a direct result of the macroeconomic conditions globally. The Ethereum merger could not have happened at a worse time as the markets are not that strong. Due to rising inflation, The Federal Reserve took an extremely bearish stance on the market as their main goal is to control inflation.”

Furthermore, Prashant Kumar, Founder and CEO at weTrade said, “Ethereum completed a historic update with the merger last week. With such a big move, teething problems are bound to occur. There was some amount of short-term selling that was also expected. However, we are seeing a decline in all cryptocurrencies and not just Ethereum. The current decline cannot be attributed to the merger alone, but global economic factors including inflation increases in the US are major contributors to this.”

Talking about where Bitcoin is likely to be headed, the Mudrex CEO said: “The KPI data released has negatively impacted the Bitcoin market, so BTC is likely to test the buyer’s commitment between US$19,000 and US$18,000 support. We may see a bullish pattern if BTC can survive above this support.”

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