Crypto Market Update: Powell dampens investors’ hopes

By Raffaele Redi

Sales are hitting all leading cryptos as the Fed is poised to raise interest rates in March

Bitcoin, Ripple and other crypto currencies on a trading screen with prices and charts. 3D illustration                                 
Crypto investors expect Fed news to hit harder than Russia’s potential crypto ban – Photo: Shutterstock
                                

The price of lead cryptos persisted in a slump on 27 January.

Investors fear a lack of liquidity will hit cryptocurrencies as a result of tightening measures by the Fed, with the words of its chairman, Jerome Powell, seen to hurt cryptos more than recent Russian Central Bank announcements.

“The Federal Open Market Committee kept its policy interest rate near zero and stated its expectation that an increase in this rate would soon be appropriate. The Committee also agreed to continue reducing its net asset purchases on the schedule we announced in December, bringing them to an end in early March,” said Powell in a press conference on 26 January.

As the Fed could start tapering soon, there could be less funds to pour on risky assets like cryptocurrencies. This has additionally dampened investors’ hopes in the wake of a possible softer Russian decision on cryptocurrencies; earlier this week the Russian Central Bank proposed their ban.

During a meeting with members of the government, Russian President Vladimir Putin said that the country could have some “competitive advantages especially in so-called mining”, asking both the government and the bank “to come with an unanimous opinion” in the future after a further discussion on the matter.

US crypto miners can take a breath

Russia-Ukraine tensions weighed heavily on traditional stock markets, which were mixed at noon, with the possibility of conflict affecting commodities prices too.

The price of Brent Crude was 0.9% higher at $90.75 per barrel, with US WTI higher by 0.9% at $88.09. Gold was $1,809.22 per ounce, about 0.6% lower in the last 24 hours.

Large miners such as Marathon Digital Holding and Riot Blockchain are set to take a breath after the bloodbath of the previous trading sessions, as Kazakhstan authorities imposed a break on local miners’ activities until February due to power shortages on the local grid.

As it is the second-largest world miner, Kazakhstan being shut eased the competition. Pre-market figures project the Riot share value to about $14.45 after a 0.8% gain, while Marathon is about to open the daily US trading session higher by 1.2% at $21.70, though all the major cryptocurrencies were all trading lower at midday.

Bitcoin dominance at 39%

According to Currency.com, BTC, the largest cryptocurrency by market capitalisation, is trading 3% lower over the past 24 hours at $36,728.81 – and 12.6% lower over the past seven days.

The market cap of BTC was around $695.6bn, representing around 39% of the crypto market capitalisation, while the leading crypto’s trading volume was around 16.6% higher at $32.3bn in the past 24 hours.

The total crypto market capitalisation fell by around $44bn at $1.705trn to 1.661trn in the past 24 hours.

Sales hit for Ethereum and Solana

In line with major cryptos, the digital silver, ether (ETH) was trading 2.9% lower at $2.461.75, with a market capitalisation of $293.8bn. The cryptocurrency’s trading volume was around 44.6% higher at $22.1bn in the past 24 hours.

Meanwhile, binance coin (BNB), now the fourth-largest cryptocurrency by market capitalisation after the USD backed stablecoin Tether ($78.3bn), was trading 3.8% lower at $373.24, with a market cap of $61.5bn and a trading volume of $2.3bn – almost 13% higher in the past 24 hours.

Elsewhere Solana (SOL), Ether’s main competitor in powering NFTs and the metaverse, was trading 5% lower at $92.10, with a market cap of $28.8bn and a trading volume of $3.2bn, 20.8% higher in the last 24 hours. Finally, Cardano (ADA) was trading 3.5% lower at $1.06.

Top gainers and losers

Elsewhere, the likes of several other minor cryptos witnessed an increase of more than 100% in the past 24 hours.

On the flip side of the coin, Kuro Shiba (KURO) was trading down by over 100% with its price touching the zero USD level.

All prices are correct as of 13:00 GMT (UTC -1).

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