Bitcoin fell further in Wednesday afternoon trading in Asia, while Ether lost the most ground among the top 10 cryptocurrencies by market capitalization. Ethereum Classic fell more than 15%.
See related article: Markets: Bitcoin slumps below US$19,000, Ether drops despite Merge progress
- Bitcoin dropped 5.6% in the past 24 hours to US$18,801.4 at 4:30 p.m. in Hong Kong, according to data from CoinMarketCap. Ether fell 8.5% to US$1,519.3, the biggest drop among CoinMarketCap’s top 10 tokens.
- Crypto markets are reacting to a rise in U.S. Treasury yields on Tuesday, which support the Federal Reserve’s aggressive stance on raising interest rates, according to Bobby Ong, COO and cofounder of crypto data provider CoinGecko.
- The expectation is the Fed will raise 75 basis points at its meeting this month, Ong said.
- “Earnings downgrade, coupled with the escalating energy shortage in Europe over the last few weeks do not work in favor of the equities market; this has a natural spillover effect on cryptocurrency markets,” Ong told Forkast in an email.
- Ethereum Classic, the original network from which Ethereum was forked, lost 15.6% to US$34.3, though it was still up 4.8% over the past seven days. Cardano fell 7.8% to change hands at US$0.46, making it the biggest loser after Ether among the top 10.
- Asia equity markets were mixed, with the Hong Kong Hang Seng index down 0.83%, and Japan’s Nikkei 225 index off 0.71%. The Shanghai Composite Index nudged up 0.088%.
- Investors also have two potential market-moving events next week to consider, said Ong. The Ethereum network “Merge” is expected to conclude, while the U.S. August consumer price index comes out on Sept. 13 and the number could influence Fed policy toward raising rates to tackle inflation.
- “Both events will likely significantly influence cryptocurrency market movements in the coming days and weeks.” he said.
See related article: Slowdown in crypto interest to continue for rest of the year: KPMG