empty
19.09.2022 03:43 PM
Bitcoin drops sharply on Monday

The leading cryptocurrency has declined early on Monday and hovered at $18,678 at the moment of writing.

According to CoinMarketCap, Bitcoin peaked at $20,087 over the past 24 hours.

BTC lost 7% on Friday and closed near $18,232.

This image is no longer relevant

The leading cryptocurrency slid down following the release of the latest US CPI data by the Bureau of Labor Statistics. Inflation in the US decreased to 8.3% in August from 8.5% in July. Economists expected inflation to reach 8.1%.

Fed policymakers will meet on Wednesday to decide on another interest rate hike. The regulator will examine inflation data particularly carefully. The slight decline of CPI is unlikely to deter the Fed from hiking the interest rate by 75 basis points, analysts say. Last week, Fed chairman Jerome Powell said the US central bank was ready to act decisively against record high consumer prices.

Traders are pricing in a 90% chance of a 75 bps increase this week, with a 50 bps move now considered to be unlikely.

According to analysts at Kaiko, Bitcoin's volatility is notably tied to the results of FOMC meetings.

The high correlation between Bitcoin and the Fed's monetary policy has first been observed in the summer of 2021, which indicates that the crypto market has long been influenced by key macroeconomic indicators.

For example, BTC surged above $40,000 in May 2022, when the Federal Reserve increased its interest rate to a target range of 0.75-1%. On the same day, Bitcoin dropped below $36,000 and entered a lengthy period of downward correction.

In June, Bitcoin immediately surged after the Fed raised the interest rate to a target range of 1.5-1.75%.

In the upcoming few months, policy moves by the world's central banks would have a stronger impact on the digital assets market, as interest rate hikes would significantly limit the ability of market players to invest into risky assets such as cryptocurrencies.

Altcoin market

Ethereum, Bitcoin's main competitor in the crypto market, also declined on Friday. At the moment of writing, ETH was trading at $1,300. Over the past 24 hours, the altcoin lost 10% and finished the session at $1,280.

Early on Thursday, September 15, Ethereum successfully transitioned to the proof-of-stake algorithm (PoS) from the proof-of-work algorithm (PoW), as part of its major update titled The Merge. The first block on the PoS network, which no longer requires mining, has already been created. The reward for this block was 45 ETH.

Bitcoin's main competitor advanced following the update, but reversed course and declined by 8.2% afterwards.

Last Thursday, founder of Ethereum Vitalik Buterin confirmed that the transition to PoS was successful, and that there were no technical issues during The Merge. Earlier, the Canadian-Russian programmer stated that the transition to PoS, which would reduce transaction fees to 2 cents, would make digital assets more popular. Rising transactions fees have pushed down the popularity of crypto payments, Buterin noted.

As the long-awaited update concluded, trading volume at crypto exchanges increased significantly to $28.6 billion on Friday from $18.1 billion on September 6.

Out of the top 10 cryptocurrencies by market capitalization, most currencies were in negative territory over the past 24 hours, with the exception of a few stablecoins. The worst-performing cryptocurrencies were Ethereum (-10.28%) and Cardano (-9%).

The top 10 cryptocurrencies had similar performance over the past week, with most coins posting losses except a couple of stablecoins. Ethereum lost 26.62% and was the worst-performing cryptocurrency of the past week.

According to CoinGecko, the best-performing cryptocurrency out of the top 100 coins by market cap was Chiliz (+0.15%), while the worst-performing currency was Ethereum Classic (-17.14%).

Chiliz was also the biggest gainer of the past week – the cryptocurrency jumped by 12.55% over the previous 7 days. The biggest loser of the past week was Terra, which slumped by 47.71%.

The overall market cap of the crypto market is currently at $925 billion, the lowest level since September 7.

The market cap has declined almost three-fold from November 2021, when it stood at more than $3 trillion.

Irina Maksimova,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

Markets in fear: Nasdaq plunges 1.71% while gold hits record highs

Tech stocks sink as gold surges to a new record Nvidia dropped as the conference annual of software developers kicked off. Tesla fell after RBC cut its price target

09:35 2025-03-19 UTC+2

Markets in fear: Nasdaq plunges 1.71%, gold hits record highs

Nvidia falls as annual software developers conference begins Tesla falls after RBC cuts price target Gold hits all-time high of $3,038.90 an ounce Alphabet falls after $32 billion deal

Thomas Frank 06:48 2025-03-19 UTC+2

US Market News Digest for March 18

February data revealed a 0.2% increase in US retail sales, signaling robust consumer activity. However, New York's manufacturing activity declined in March, pointing to localized economic weakness. Despite these mixed

Ekaterina Kiseleva 13:51 2025-03-18 UTC+2

EUR/USD Pauses as S&P 500 Forecasts Worsen – How to Find Balance?

The global market is currently struggling to find balance in key currency pairs and stock instruments. This is particularly challenging given the recent decline of the euro and the weakness

Larisa Kolesnikova 07:52 2025-03-18 UTC+2

Global Market Dynamics: China, the US and AI Are Driving New Trends

Intel rises after a report that the new CEO plans to reorganize manufacturing and artificial intelligence operations. February retail sales rise 0.2%. New York manufacturing activity fell in March. Hong

05:16 2025-03-18 UTC+2

Global Markets in Action: China, US, and AI Set New Trends

Intel Gains After New CEO Plans AI Manufacturing and Operations Overhaul February Retail Sales Up 0.2% New York Manufacturing Activity Falls in March Hong Kong Stocks, Kiwis Gain on China

Thomas Frank 04:59 2025-03-18 UTC+2

US Market News Digest for March 17

US markets rally on Friday: S&P 500 gains 2.1%, Nasdaq Composite rises 2.6% The US stock market ended the week on a high note, as if the recent turbulence never

Natalia Andreeva 14:04 2025-03-17 UTC+2

Fed against trade war. Can monetary policy rescue economy?

The US stock market continues to experience turmoil, driven by uncertainty surrounding Donald Trump's stance on import tariffs. Investors are eagerly awaiting the Federal Reserve's meeting next week, hoping

13:23 2025-03-17 UTC+2

Fed vs. Tariff War: Will Monetary Policy Save the Economy?

The U.S. stock market continues to be shaken by Donald Trump's uncertain stance on import tariffs. Investors are eagerly awaiting next week's Federal Reserve meeting, hoping for hints

Thomas Frank 10:07 2025-03-17 UTC+2

US Market News Digest for March 14

Yesterday, the S&P 500 index hit the target level of 5,516 – the same level as June 20, 2024, which is the 23.6% Fibonacci retracement of the entire rally from

Natalia Andreeva 10:34 2025-03-14 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.