- Crypto and traditional markets continue to experience large-scale sell-offs in response to the Fed’s tightening monetary policy
- According to Glassnode, has the rush, the risk of assets like Bitcoin to decrease, the network transaction costs of the token increased by 15% above average
The markets for cryptocurrencies have been in the red since the value of the largest crypto token, Bitcoin, fell below $40,000 on April 28. Since last Thursday, the decline has become even more intense.
Yesterday, bitcoin’s price fell below $30,000 for the first time since July 2021 as markets — traditional and cryptocurrency — saw heightened sell-offs in response to renewed aggressive monetary policy from the US Federal Reserve.
The flagship crypto’s price was spotted as low as $29,944 during yesterday’s session on CoinMarketCap. Though it has since surged to $31,751, the most prominent digital token is at 53.75%, below its all-time high.
Increased network activity as investors rush to de-risk
In this week’s edition of Glassnode’s week on-chain reportasked the Blockchain-Data and intelligence providers note that user activity on the Bitcoin network has spiked recently, with “urgent” transactions increasing as investors seek to unfreeze their risky positions.
Glassnode explained that last week users paid higher than usual fees as they sought priority for the risk mitigation transactions they sent to Bitcoin’s mempool. Fees increased about 15% higher than normal.
The analytics firm noted lower Bitcoin accumulation, with most additions occurring to “shrimp” — those holding less than 1 BTC. Even then, the accumulation of this investor class in the past week was lower than in recent months.
influence of the Fed
The last FOMC meeting took place between May 3rd and 4th. Initially, crypto markets reacted positively as Fed Chair Jerome Powell ruled out the possibility of a 0.75% rate hike.
The FOMC instead accepted the expected half-point hike. As the Fed will steadily tighten monetary policy throughout the year to address the scourge of inflation To combat this – draining liquidity and raising interest rates (which have remained constant for years) – crypto assets are expected to seek lower bottoms.
Bitcoin’s hitting a 10-month low has extended its bearish price action to altcoin markets, which have seen uncontrolled declines.
Several top tokens have fallen by double digits in the last week alone. ETH is currently exchanging hands at $2,430 and is down 16.24% over the past seven days. BNB is down 17%, Solana down 14.28% and LUNA down 61.77% is arguably the most significant decline of any leading token over the period. LUNA’s downturn was coupled with UST losing its bond over the weekend.
Source: Crypto News Deutsch