Both Bitcoin and Ethereum prices have fallen by about 7 percent in the past 24 hours. This fall was accompanied by enormous liquidations. The reason? New Federal Reserve Statements.
Bitcoin price drops by 7.5 percent
At the time of writing, the price of 1 Bitcoin is around $21,713. That is about 7.5 percent lower than a day ago. The trading volume is about 8 percent higher, which shows that there is very strong selling pressure.
Ethereum also has to deal with a large price drop
Ethereum is also experiencing a significant price drop today. At the time of writing, the price of 1 Ether token is around $1,735. This while the Ethereum price was still around $1,856 yesterday. That means the largest altcoin in the world has lost about 6.5 percent of its value.
With a current market cap of $212.5 billion, the Ethereum price is down more than 64% from its all-time high of $4,891 reached in November.
A huge liquidation
Due to the sharp drop in prices, about $540 million more has been liquidated from traders in the crypto market in the past 24 hours, data from Coinglass shows.
Bitcoin leads the liquidations at $201.3 million, followed by Ethereum at $132.7 million in the same period. The vast majority of liquidations for the two leading cryptocurrencies came from large long positions.
The crypto market reacts to the Federal Reserve
Today’s fall is most likely related to the Federal Reserve’s expected rate hike next month.
As reported by the Wall Street Journal, James Bullard, the president of the St. Louis Fed, is in favor of a 0.75% rate hike next month. San Francisco Fed President Mary Daly also confirmed a rate hike of 0.50% or 0.75% next month, as reported by Reuters.
Both have confirmed that interest rates can be raised as long as rising inflation remains under control. And as you may know, another rate hike is never a good sign for investors in risky assets.
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