Crypto Market Loses $310 Billion In A Week As Bitcoin Drops Below $24,000

The general crypto market continues recording a downside trend as the mood surrounding the industry continues to be strongly bearish in the wake of growing inflation and rises in interest rates around the world.

In the past week, the global crypto market dropped from $1.286 trillion on June 6 to around $975 billion on June 13 as $311 billion has been wiped from the market cap in a week, based on CoinMarketCap data.

In the past 24 hours, the crypto market lost over 8.6%, while the whole volume of the crypto market within the time was $110.52 billion, representing a rise of 27.18%.

Bitcoin Price Technical Analysis

For now, Bitcoin (BTC) is at $23,875. The flagship crypto is down 12.75% on the day and a further 23.67% across the past week, with a total market value of $458 billion as Bitcoin dropped to an 18-month low.

As a result, not only has bitcoin gone from trading above $31,300 in the past week, but it has also seen the biggest crypto lose nearly $130 billion from its market capitalization. Since Bitcoin is the biggest asset by market capitalization in the crypto space, its price movement has a huge effect on the rest of the market and its sentiment.

Despite all that, Bitcoin has been known to experience many cycles in the past, and every time it has managed to recover strongly after it falls. Notably, during history, 100% of investors that wait for at least four years after making their purchase saw their initial investment rise.

Global Recession Fears Impact Crypto Market

Fears of a global economic slowdown are now putting pressure on the crypto market, which might encourage investors to avoid more risky trades.

Within the last 36 hours, Dogecoin has noted that the value of Cardano, Dogecoin, and Solana have dropped by over 10t. At the time of writing, the price of Ethereum has plunged to $1,200, marking a plunge of 75% from its all-time high, which was reached in November 2021 at about $4,900.

In recent months, traditional equities markets and the crypto market have become more connected with each other. The value of cryptos has dropped along with the S&P 500 which dropped by 2.9% on June 10 and the NASDAQ, which went down by around 3.5%.

Fed Rate Hikes                        

A 2-day meeting of the Federal Reserve is scheduled for the coming week, and it is majorly expected that interest rates would be increased further at the meeting. Moreover, Treasury Secretary Janet Yellen said a pessimistic view by expressing worries over integrating cryptos into 401(k) plans.

The first projection of the interest rate rise is projected at a 50 basis point increase; but, new information from the recently issued consumer price index data has generated worries that the Federal Reserve may take a lot of aggressive action that would pave the way for a recession.

Eventually, inflation surged to an all-time high of 8.6% in May, a figure that has never been seen since 1981. This scenario has happened due to external factors like the rising costs of food and energy, time will tell in case Bitcoin can revert to becoming a hedge against inflation in the coming months as many had expected.