$65 billion wiped from the market cap as Crypto prices plummet, here’s why!
Crypto Prices Crash
These past 24 hours, the crypto saw a massive $65 billion wiped from the crypto market cap as multiple cryptocurrencies price fell to low prices, rendering the crypto market red and the crypto market cap to fall below the $1 trillion mark again.
Bitcoin, the biggest cryptocurrency in the world, saw its price drop by 8% these past 24 hours and by 15.44% within the past week. It’s now trading at a price of around $18,400 at the time of writing.
Ethereum also saw quite a drop in its price, falling by 11% the past 24 hours and 25% the past week. Despite all the hype and excitement leading up to The Merge, one of the biggest changes in it’s blockchain, Ethereum’s price hasn’t been able to reflect all this excitement. The cryptocurrency is now trading at a price of $1,289 at the time of writing.
Aside from that, altcoins are also seeing big drops in prices. This includes Cardano falling by 10% these past 24 hours, Solana by 8.4%, Dogecoin by 8.6%, and Polkadot falling by 12.47%. In total, around $6.5 billion have been reportedly wiped from the crypto market cap within these past 24 hours.
Reason For The Plunge
One of the biggest reasons for this massive drop in the market may be due to the upcoming Federal Reserve meeting taking place on the 21st of September.
Federal Reserve Meeting on the 20th.
Market expects a 0.75% increase to rates. If this happens then markets could breathe a sigh of relief.
But there's like a 1 in 5 chance of a 1.00% increase, which would likely cause a market panic.
The uncertainty you see in today's price
— Lark Davis (@TheCryptoLark) September 19, 2022
According to the Fed Watch Tool, the FED are most likely going to hike their interest rates by 75 basis points, however, it may also be possible that they hike these rates by 100 bps instead.
The uncertainty between whether the FEDs will hike interest rates by 75 bps or 100 bps have seemed to cause bearishness and has been the biggest reason for so much volatility in crypto prices these past 24 hours.
Aside from that, earlier this week, the Investment banking company Goldman Sachs warned that if the FEDs hike their interest rates far higher than the expected 75 bps, this could cause a 26% fall in the S&P 500. With stocks and cryptocurrency prices often being intertwined, many crypto investors have also been bracing for prices to crash following the FED’s upcoming announcement.