On Tuesday, the cryptocurrency market saw a pullback and the ethereum ecosystem was hit hard. The decline comes as the market prepares for a major earnings report, the next Federal Reserve meeting and second-quarter GDP data in the coming days. After today’s drop, the value of the cryptocurrency market has fallen below $1 trillion.
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Coinbase and MicroStrategy stocks were also hit hard today as cryptocurrencies and global financial markets await the next Federal Reserve meeting and upcoming second-quarter GDP data.
Crypto markets fall below $1T
The cryptocurrency market has been hit by another sell-off.
Bitcoin, Ethereum and other major assets tumbled on Tuesday in anticipation of a turbulent week for cryptocurrencies and global financial markets. At press time, Bitcoin was trading around $21,000 after suffering a 4.9% hit, while Ethereum plummeted to $1,390 after suffering a 9.1% slump, according to CoinGecko.
Many other ethereum-adjacent assets, including Lido’s LDO token, Convex Finance’s CVX, Uniswap’s UNI, and Polygon’s MATIC, have posted double-digit losses over the past 24 hours, raising concerns about the alleged The strength of the “merger deal” casts doubts. Leading to Ethereum’s long-awaited proof-of-stake upgrade.
Crypto-centric stocks also took a hit today as U.S. markets opened. Coinbase’s COIN fell 15.3% on the day to trade around $57 after news that the SEC is investigating allegations that the exchange listed unregistered securities, while MicroStrategy’s MSTR has been close to Bitcoin since the company pushed for the acquisition related. The multi-billion dollar top cryptocurrency fell 10.2 percent to around $239.
Markets prepare for volatility
The downturn came before a busy few days in financial markets. Alphabet and Microsoft will report their second-quarter earnings later tonight, while Meta will report its earnings for the same period tomorrow. On Thursday, both Amazon and Apple will report earnings. Traders will pay close attention to the big tech company’s conference call over the next few days as they can help understand the state of the economy. Tesla revealed last week that it reduced its bitcoin position by 75% in the second quarter, likely selling its bitcoin holdings at a loss (Tesla’s basis in early 2021 at an average cost of about $32,000 per coin). , $1.5 billion was spent on bitcoin, but bitcoin fell to $18,000 in Q2).
In addition to the various earnings calls coming up this week, the market is preparing for Wednesday’s Federal Open Market Committee. Federal Reserve Chairman Jerome Powell is expected to announce a 75 basis point rate hike to rein in soaring U.S. inflation; the Fed’s recent rate hike led to a sell-off as investors sought risk aversion. The Bureau of Economic Analysis’s GDP data for the second quarter of the year is also set to fall on Thursday, which could reinforce signs that a recession is imminent if the economy resurfaces (the economy shrank 1.6% in the first quarter).
The White House shared a transcript of an interview with Treasury Secretary Janet Yellen on Sunday in which he commented on the state of the U.S. economy, dismissing suggestions that the U.S. economy could be in a recession. While a recession has historically been defined as two quarters of an economic downturn, Yellen confirmed that the technical definition of a recession covers “a wide range of data” compiled by the National Bureau of Economic Research.
After today’s bloodshed, the total value of the cryptocurrency market fell below $1 trillion again. At press time, the global cryptocurrency market capitalization is around $996 billion, down nearly 70 percent from its November 2021 peak.
Disclosure: At the time of writing, the author of this article owns ETH, MATIC, and several other cryptocurrencies. They also have exposure to UNI in the cryptocurrency index.
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