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The crypto market suffered a major dip on Thursday. The entire crypto market made an around 8% loss, with the total market capitalization dropping to around $2.1 trillion. Most of the coins are still trading in the red zone, but mild recovery attempts have been recorded.
The exact cause of the dip has not been established, given that there have been no major developments in the crypto space. However, the crypto market dip correlates with the stock market that also dipped after the US Federal Reserve announced plans to increase interest rates.
The Crypto market takes a nosedive
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Bitcoin (BTC/USD) dropped to lows of around $42,000 during the market recession. The primary cryptocurrency was last trading at these levels in September before starting a bullish rally. During the past 24 hours, Bitcoin’s price has lost around 7.1% in value.
Ethereum was also one of the hardest-hit cryptocurrencies during the downtrend, with the largest altcoin losing nearly 10% of its value. At the time of writing, Ethereum was trading at around $3450, around 29 below its all-time high of $4800.
The other popular cryptocurrencies in the market have also registered a downtrend within the same period. Solana is trading at around $150 after an over 11% dip during the past 24 hours. Binance Coin (BNB/USD) and Cardano (ADA/USD) have also dipped by around 8% and 8.6%, respectively.
XRP, LUNA, Polkadot and Avalanche are also dealing with losses of 7.9%, 9.24%, 11% and 9.84%, respectively.
Losses attributed to Fed announcement
The US has been dealing with a rising rate of inflation that recently hit a four-decade high. The US Federal Reserve is now stepping in to fix this issue. The institution noted that it will raise the interest rates over the coming months.
Investors believe that the increase in interest rates will happen soon, given the deteriorating value of the dollar in the global markets. As such, this triggered a market-wide selloff.
The crypto market is not the only one suffering from losses. The stock market also suffered a mild dip. The Nasdaq Composite dipped by 3.3% during the past 24 hours, while the S&P 500 has dropped by 1.94% within the same period.