By Franklin Smith
Crypto assets remain in turmoil amid challenging economic conditions.
Digital coins continue to struggle over the last day as the market hovers with a pessimistic macro outlook, translating to declines in riskier assets. The previous 24 hours saw Bitcoin extending its plummet.
While publishing this content, the world’s largest crypto traded at $28,027.42, losing 10.22% within a day (Coinmarketcap data). Such moves by Bitcoin triggered massive crashes in the crypto world, with most altcoins losing crucial support barriers.
Dogecoin trades at $0.0775, following a massive 28.93% loss in 24 hours. On the other side, Shiba Inu lost 33.48% within that time frame, trading at $0.0000106.
What Happened
Cryptocurrencies seemed to perform poorer than tech stocks over the latest months. That came as Fed Reserve tightened and raised the benchmark lending rate (overnight). Fed raised these rates nearly 0.75% over the previous two meetings, plus a half-point increase during its conference early in the month.
Rate hikes by Federal Reserve make safer products such as the US Treasury bills. That move makes market players seek higher profits from riskier assets, leading to pressure.
Glassnode analyst stated that Fed’s actions back the narrative that BTC traders were looking to de-risk or add collateral to margin amid market volatility. Furthermore, inflation remains high.
New Bureau of Labor data indicated that the CPI (Consumer Price Index), which monitors day-to-day services and goods’ prices, increased by 8.3% YOY in April. Though the figure was lower than March’s increase, it remained higher than the analyst’s forecasted 8.1% increase.
Though many have perceived BTC as a lucrative inflation hedge due to the 21M tokens supply, the crypto hasn’t proved that as Bitcoin prices remain more than 50% down within the past six months.
So What
Meme coins Shiba Inu and Dogecoin witness massive crashes as the broad market is in turmoil. Though correlated to BTC, these tokens are riskier since they lack fundamentals, depending on investors and the community’s excitement.
For now, Shiba Inu as Dogecoin will remain bearish. Nevertheless, analysts remain optimistic about Bitcoin’s long-term projection.
What are your views about meme coins amidst the ongoing bearish wave in the market? Comment below.