The last several days have been extremely taff for the cryptocurrency market; cryptocurrencies have been suffering from heavy selling due to hawkish signals from central banks, and investors are worried that an aggressive monetary policy could tip the economy into recession.
The US central bank took a more aggressive stance to fight inflation and raised interest rates by 75 basis points at its latest meeting, and surging recession fears are crippling the appetite for risky assets.
Cryptocurrencies have been among the first assets sold as the markets tumble, and this situation also negatively influences Polygon MATIC/USD, Fantom FTM/USD, and Theta THETA/USD.
European Central Bank also signaled that it would change its policy in an effort to control inflation, while Christine Lagarde, president of the European Central Bank, said that digital cryptocurrencies are rife with speculation and that they are not worth anything.
This Saturday, Bitcoin fell below $20000 for the first time since 2020, and according to reports from Bloomberg, the largest cryptocurrency by market value has dropped for 12 days in a row.
Since mid-November, the cryptocurrency market has lost more than half its value, while Edward Moya, senior market analyst at Oanda, said that we could see new lows for the cryptocurrency market and Bitcoin. Edward Moya added:
Extreme volatility and a lack of liquidity in the Bitcoin market have made it increasingly difficult for large-scale crypto investors to continue holding onto their holdings. As a result, they’ll be forced to close positions on Bitcoin derivatives products because they don’t have enough collateral.
Bears in control of Polygon (MATIC)
Polygon (MATIC) has weakened from $0.66 to $0.34 since the beginning of June 2022, and the current
