It’s not only the stock markets that are bearing the brunt of global meltdown, even cryptocurrency markets are also facing massive sell-off amid rising inflation worries. Considering the latest slide, investors have lost over $2 trillion (about ₹15.65 lakh crore) over eight months.
Major digital tokens traded in the red on June 13 as the global crypto market cap fell sharply to the $1.04 trillion mark, dropping more than 9.5 percent in the last 24 hours. Meanwhile, the total cryptocurrency trading volume zoomed over 28.91 percent to $113.23 billion, according to the coinmarketcap.
Bitcoin, the world’s favourite cryptocurrency tumbled as much as 10 percent to $24.818, at an 18-month low. In rupee terms, Bitcoin fell 10.40 percent to trade at ₹1,934,104 at 2:00 pm (IST). It is down by around 50% so far this year.
Ether, the world’s second-largest cryptocurrency in terms of market capitalization, which is linked to the Ethereum blockchain, also fell 14 percent at its 15 months low to $1,257. In rupee terms, Ethereum tumbled 14.32 percent to trade at ₹98,655 in the last 24 hours.
Traders are boosting bets for a more aggressive pace of Federal Reserve tightening after data Friday showed US inflation jumped to a fresh 40-year high in May, reported Bloomberg, which triggered a selloff in risk assets including crypto and stocks.
“A critical support level is breached, the Bitcoin prices will keep staging relief rallies to gain back ground towards $29,000 levels – but it will be meeting resistance there for the time being. A long term accumulating investor can pace out staggered accumulation between $18,000-$29,000", said Joseph Massey, MD, Cryptowire.
However, he believes that with the present prevailing economic conditions – particularly with a war hampering economic activity along with intermittently resurging pandemic scares, the road to recovery looks very challenging in the near term.
Darshan Bathija, CEO & CO-founder of Vauld said, "An on-going sell-off was seen over the weekend, as BTC traded near the $25,000 level. The crypto Fear and Greed Index still showed a sentiment of “extreme fear”; this indicated that most investors were still extremely bearish. The recent inflation numbers (consumer price index) seen in the US has had a negative effect on most markets."
"Most investors will be keenly looking at the U.S. Federal Open Market Committee meeting slated for June 14 and 15th. Though BTC has been moving in tandem with the equities market. If the crypto markets can move away from being correlated to the traditional markets, it would be a highly optimistic signal," he added.
