As the post-Fed sentiment deteriorates, the crypto selloff resumes

17 Jun 2022 , 10:18 AM

A day after the Federal Reserve boosted interest rates by the greatest in decades, the selloff in digital assets intensified Thursday, with losses in US equities also escalating.

Ether is having a worse time than others, falling as high as 8.3% on Thursday to trade around $1,080. The Ethereum blockchain’s native token is set to drop for the tenth day in a row, the longest losing trend in history dating back to February 2018. It has dropped by about 40% since the beginning of June.

Bitcoin, on the other hand, fared better, albeit still losing 4.2% at one point during the session. According to several investors, the largest cryptocurrency by market capitalization is frequently used as a safe haven for crypto investors during periods of high volatility.

Cryptocurrencies and other high-risk assets have been under pressure, with the S&P 500 closing at its lowest level since the end of 2020 on Thursday, and the tech-heavy Nasdaq 100 tumbling 4%. It’s happening while the Federal Reserve boosts interest rates in an attempt to counteract rising inflation, creating an adverse atmosphere for speculative assets. This year’s crypto market worth has dropped by more than $1 trillion due to the prolonged decline.

Meanwhile, Cardano, Solana, and Dogecoin have all experienced difficulties. Polkadot has lost about 10% of its value. Over the last month, crypto markets have delivered heartbreaking losses, but many have welcomed the wringing out of excesses and sky-high speculation.
The collapse of the Terra blockchain last month, as well as the recent decision by crypto-lender Celsius Network Ltd. to halt withdrawals, have taken their toll, while a tweet from the co-founder of crypto hedge fund Three Arrows Capital this week fuelled speculation that it had suffered significant losses.

Negative developments have afflicted a wide range of sectors within the crypto space. Many market analysts are anticipating a further discount in price as a result of sackings and appointment curbs announced by a number of companies in the area. According to Glassnode, even long-term investors are finding it hard to hold their cryptocurrencies.