Capitalization of the crypto market fell to the levels of January 2021

by in Cryptocurrency News

Crypto market

Amid a sharp decline in the prices of most cryptocurrencies, the total market capitalization fell below the $1 trillion mark.

The chart below shows that the current value of $953 billion is comparable to the levels at the end of January 2021.

On the night of June 14, the indicator fell below the level of $900 billion.

Analysts at Blofin attribute the turbulence in financial markets to a drop in confidence in risky assets against the backdrop of accelerating inflation in the US and response measures to tighten monetary policy.

CME FedWatch data indicates a 67.8% chance of a 50bp Fed rate hike in June, a 32.2% chance of a 75bp increase, and an 83.5% chance of a 75bp increase in July. P.

Trending: MetaMask announces integration with Apple Pay

Inflation in the United States in annual terms in May amounted to 8.6%, which was the highest value since December 1981.

“Higher-than-expected figures have alarmed investors. They were worried that rising inflation would plunge the economy into recession,” Blofin experts shared their thoughts.

The 2-year Treasury yield reached 3.22%, the highest level since 2007. The value briefly exceeded that of 10-year Treasuries.

In all likelihood, investors fear that the Fed will take more aggressive measures to curb inflation. An inverted yield curve usually signals an upcoming recession.

Trending: NFT Marketplace OpenSea Suffered a Data Breach

At the time of writing, Bitcoin is trading around $22,390 and Ethereum is trading at $1,220, according to CoinGecko. Price declines in relation to historical price highs amounted to 67.4% and 74.9%, respectively.

Former BitMEX CEO Arthur Hayes found a significant concentration of open interest in options on the Deribit exchange at $20,000 and $1,000 for Bitcoin and Ethereum, respectively. According to him, falling prices below the designated levels are fraught with massive selling pressure on spot markets.