The crypto market cap has fallen 15% in the last seven days, falling from $1.069 trillion down to $903 billion as of writing.
The majority of losses occurred on Sunday, September 18th. However, there was a steady increase in outflows starting in the morning (UTC). The pattern was maintained into Monday morning with significant drops in the early hours.
After hitting $900.9 trillion, a local bottom was reached at 08:00 (UTC), marking a nine-week low. The market has seen an inflow of $3 billion since bottoming.
What’s next for crypto after the Merge?
The Ethereum Merge was the most important event in crypto over the last week.
The Merge was finally completed after months of hype. Some supporters claimed it would boost the market while others were skeptical. Charles Hoskinson, CEO of Input Output, pointed out that the Merge hasn’t improved Ethereum’s “performance or operating cost nor liquidity.”
Many other criticisms have been made post-Merge. These include claims that Ethereum is now considered to be a security threat and, perhaps most alarming, the centralization in the network, where only two nodes currently control 46% transactions.
Ethereum’s value has fallen 21% since then. It was worth $1,640, but it is a classic example of a buy the rumor, sale the news event.
Lark Davies, a YouTuber, recently stated that there aren’t any similar hyped events to support the crypto market in the remainder of the year.
Similar to the macro scene, there have not been any significant changes. The dominant narrative is still the squeeze on household incomes due to spiking inflation, and subsequent pressure to increase interest rates.
Many expect a 75 basis-point increase at the Federal Open Market Committee’s (FOMC) meeting on Tuesday.
However, the latest release of CPI data, which showed an inflation increase of 0.1% in August, against a hot labor market, makes it clear that inflationary pressures have not been under control.
Yardeni Research’s Chief Investment Strategist, Ed Yardeni, commented recently that the Fed should “get over it” and implement a 100-basis point increase.
Markets will pay attention to the upcoming FOMC. Market participants pricing in the rate hike will likely be responsible for crypto’s sell-off.
Crypto market cap drops to $900B due to major sell-off
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