Sharp decline in Bitcoin
Selling pressure in the cryptocurrency market has accelerated again; While Bitcoin dropped below $69,000, $130 billion was deleted from its market value in one day.
Quick Look
- With the sharp decline in the cryptocurrency market led by Bitcoin and Ethereum, $130 billion was deleted from the market value in one day.
- The fact that inflation in the USA exceeded expectations strengthened the expectations that the Fed might increase interest rates.
AI-generated summary
Why It Matters
The fact that October consumer inflation in the USA increased by 0.4 percent monthly and exceeded expectations increased concerns that the Fed may increase interest rates.
Selling pressure in the cryptocurrency market has gained momentum again. Bitcoin and Ethereum, the two largest crypto assets in the market, have experienced sharp losses in value in the last 24 hours. While Bitcoin fell to $68,700 and fell below the $69,000 threshold, Ethereum traded around $1,922.
While the daily loss in Bitcoin exceeded 6.5 percent, the decrease in Ethereum reached 5.8 percent. Both cryptocurrencies fell to their lowest levels since August.
According to CoinMarketCap data, the total value of the cryptocurrency market decreased from 2.43 trillion dollars to 2.30 trillion dollars in the last 24 hours. Thus, approximately 130 billion dollars were deleted from the total size of the cryptocurrency market in one day. The harsh sales led by Bitcoin and Ethereum spread throughout the market and caused a significant loss in the total cryptocurrency value.
Expectations regarding monetary policy in the USA, fund movements of institutional investors and liquidations in leveraged transactions were effective in the sales wave.
Interest rate expectations hit
One of the important reasons for the decline in the cryptocurrency market was the change in interest rate expectations in the USA. October consumer inflation in the USA, announced on November 10, increased by 0.4 percent monthly, above market expectations. The increase in core inflation also exceeded expectations with 0.3 percent.
The fact that inflation exceeded expectations strengthened expectations that the Fed might raise interest rates in December. The increased possibility of an interest rate increase in futures markets caused investors to move away from risky assets.
What to Watch
AI outlook — possibilities, not facts
The possibility of an interest rate hike by the Fed at its December meeting will continue to affect the markets
Likely · Within weeks
Open Questions
- Will the Fed raise interest rates in December?
- Will the selling pressure continue to deepen?
