The cryptocurrency market had another bad day on Monday, continuing its general trend for the past two months. Almost all major currencies were lower in trading, including altcoins, after a rough weekend for most valuations.
As of 12:30 PM ET, Binance coin (CRYPTO: BNB) It has fallen by as much as 6.8% and is down by 3.5%. Cardano (CRYPTO: NO) It decreased as much as 10.7% and decreased by 5.7%, while dotted (CRYPTO: DOT) It was down as much as 11% and was at the time as low as 7.1%. finally, Solana (CRYPTO: SOL) It fell as much as 9.9% before recovering slightly, and at the time was down 6.2% in the past 24 hours.
The bigger story is still the market in general. the Standard & Poor’s 500 It’s down 1.4% as I write but Nasdaq Composite It is down 2%, and for highly volatile assets like cryptocurrencies, the declines are amplifying. Growth stocks are also seeing significant declines, and cryptocurrencies have recently moved somewhat in tandem with those. While growth stocks and cryptocurrencies were big gainers when the broad market was going higher, they are losing a lot now with the market down.
But there are two notable news events on Monday that are affecting the price of assets, cryptocurrencies in particular. The first is that interest rates continue to rise after the Federal Reserve said it plans to start reducing the size of its balance sheet in 2022. The 10-year Treasury bond rate rose by one basis point on Monday to 1.78% and is up by 29 basis points. point over the past month. By historical standards, this is still a very low interest rate for those T-bills, but higher prices tend to reduce the value of riskier assets, which helps explain why the cryptocurrency has fallen.
To make matters worse is the fact that omicron is rapidly spreading around the world, which may affect the global economy and financial liquidity. According to worldometers.com, there were nearly 3 million new cases of COVID-19 globally on Sunday, more than three times the highest daily peak during any previous wave of this pandemic. In the United States, there have been an average of 600,000 new cases per day over the past week. Even if the economic impacts of this coronavirus wave turn out to be not as severe as those we experienced earlier in the pandemic, this kind of news could send growth stocks lower.
The only news item specific to cryptocurrencies is that, due to a hitherto unexplained flaw, Queen Piece Account holders reportedly lost the ability to send or receive Cardano codes over the weekend. Coinbase hasn’t mentioned why this problem occurred, but it’s not a good look because the biggest cryptocurrency exchange is facing problems of this nature.
While big moves in cryptocurrency can be worrisome, I don’t see any major cause for panic. Token values are dropping along with the market and other high-risk/high-volatility assets, which shouldn’t be surprising. The only thing we can bet on is that wide volatility will continue to be a feature of the crypto market.
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