The digital currency market is volatile right now
Bitcoin suffered another significant knock this weekend, falling from $42,000 to roughly $40,600. Ethereum fell to slightly over $3,000 as well. The $40,000 and $3,000 levels are significant because they are psychologically significant for both assets. The two most valuable digital currencies have now returned to roughly $41,800 and $3,130, respectively, while other lower-cap currencies have not.
Solana, Avalanche, and Polygon are all in the red today, having lost more than 20% of their market value in the previous week. In addition, Axie Infinity, various DeFi tokens, and the meme currency Dogecoin and Shiba Inu have all been impacted by the market pullback.
While most assets have suffered due to the adverse attitude, outliers such as Chainlink, Harmony, and the Cosmos-based decentralized exchange Osmosis have increased in the last week.
After the Federal Reserve revealed its intentions to raise interest rates, Wednesday, the stock market took a plunge on Wednesday. This was a significant update since it showed that borrowing money will likely grow more costly as the Fed works to control inflation. Risky assets, such as equities tend to suffer under such circumstances. Likewise, digital currencies, as this week’s events showed, tend to take a hit in such circumstances.
While most major crypto assets have had a rough week, it comes after a protracted period of decline in the market. Bitcoin is currently down 39.2 percent from its early November high of $69,000, while Ethereum is 36.1 percent below its top. In addition, many lower-cap currencies have lost 50% or more of their value.
The famous Crypto Fear & Greed Index has posted a score of 23, suggesting that the market is in intense fear after this weekend’s shaky market.