The crypto market suffered significant losses at Wednesday’s trading session with most altcoins including Ethereum, pulling back from their weekly highs after the United States Federal Reserve moved forward with its hawkish monetary strategy that will allow for at least two interest rate hikes in 2023.
At the time of filing this report, global crypto market value stood at about is $1.61 trillion, postulating losses of over $80 billion with a 6.27% plunge for the day.
The Dollar Index used to track the greenback’s strength against a basket of major currencies posted gains of about 1% at Wednesday’s trading session, its biggest surge since March 2020, further weakening bullish sentiments on riskier assets.
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The pioneer crypto asset, Bitcoin, dropped below $40,000, a key support level, extending its losses shortly after Jerome Powell announced that the U.S Fed will soon tighten the monetary liquidity in the world’s most powerful economy amid rising inflation and improved economic recovery in the $21 trillion-plus economy.
Bitcoin’s price stood at $38,741.67 posting losses of about 4% for the day, with a dominance level currently at about 45%.
Consequently, many leading altcoins including Ethereum drifted lower in value except for a few crypto-assets that managed to buck the bearish trend.
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Chiliz and Shiba Inu (SHIB) rallied more than 30% for the week after the news that Coinbase, the world’s most valuable crypto exchange, would list both assets on its pro platform
A significant number of investors and traders increased their selling pressures with the 50- and 200-day moving averages on route to converge, possibly forming a strong bearish sign referred to as the death cross. Though such indicators are often known not to really give a real-time effect on prices, market analysts reveal it could, however, tame crypto bulls from breaking high.
Further price actions reveal Bitcoin bulls face headwinds in the coming days with the flagship crypto asset trading sideways over the past few days as buyers face an uphill task defending the $38,000 support levels amid weakened buying momentum, further suggesting a likely pullback towards the $35,000 price band in the mid-term.