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Bearish sentiment prevails in the cryptocurrency space.
Crypto Market Hit By Another Downturn
The cryptocurrency market is in volatile mode.
Bitcoin took another big hit this weekend as it tumbled from $42,000 to around $40,600. Ethereum also plummeted to just above $3,000. The $40,000 and $3,000 levels are notable as they act as key psychological milestones for both assets. The two leading crypto assets have since recovered to around $41,800 and $3,130, but most lower cap coins haven’t fared so well.
Solana, Avalanche, and Polygon are all trading in the red today after shaving off more than 20% of their market value in the last week. The market selloff has also hit gaming tokens like Axie Infinity, a variety of DeFi tokens, and the meme coins Dogecoin and Shiba Inu.
While most assets have suffered thanks to the bearish sentiment, outliers that have risen over the past week include Chainlink, Harmony, and the Cosmos-based decentralized exchange Osmosis.
The market took a nosedive Wednesday after the Federal Reserve announced its plans to hike interest rates. This update was notable as it indicated that the cost of borrowing money would likely become more expensive as the Fed attempts to get a hold over inflation. In such environments, risk-on assets like stocks tend to suffer. As this week proved, crypto also tends to take a blow under such conditions.
While this week has been rocky for most major crypto assets, it follows a prolonged slump across the market. Bitcoin is now down 39.2% from its $69,000 high recorded in early November, while Ethereum is 36.1% short of its peak. Many lower cap coins are down 50% or more.
After this weekend’s shaky price action, the popular Crypto Fear & Greed Index has registered a score of 23, indicating that the market is in “extreme fear.”
Disclosure: At the time of writing, the author of this feature owned ETH, ATOM, MATIC, and several other cryptocurrencies.
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