Bitcoin and Ether, the two leading cryptocurrencies, experienced a decline in value on Monday morning. Bitcoin fell below the US$26,300 mark, while Ether remained below US$1,600. This downward trend was also observed in other top 10 non-stablecoin cryptocurrencies.
The drop in prices comes after the U.S. Federal Reserve announced a hawkish policy stance at its September meeting. Although the Fed paused interest hikes for now, it indicated that another raise could be expected by the end of the year, implying that interest rates would remain higher than anticipated for a longer period. As a result, investors have become cautious, leading to a retreat in the cryptocurrency market.
Bitcoin, in particular, saw a decline of 1.22% in the past 24 hours, reaching US$26,252.57. It experienced a weekly loss of 0.91%. Markus Thielen, head of research and strategy at Matrixport, noted that the overall trend for Bitcoin is bearish and expects further downward movement as it failed to break its 50-day moving average of US$26,876. If Bitcoin continues to trade below US$26,000, Thielen believes the market could see another break lower.
Ether also dipped by 0.86% to US$1,579.12, with a weekly loss of 2.52%. Thielen expressed concern over Ethereum’s weak fundamentals and the lack of hype surrounding the EIP-4844 upgrade, which is expected to take place in Q4 2023. He believes these factors could make the Ethereum blockchain slowly obsolete. Thielen also highlighted Ethereum’s failure to rally above US$1,650 and its potential implications for altcoin sentiment.
The average fee on the Ethereum blockchain dropped to around US$1.15 per transaction, the lowest level since December 2022. Santiment, a blockchain intelligence firm, stated that historically, increased utility and affordability of Ethereum can lead to recovering market cap levels.
In addition to Bitcoin and Ether, other top 10 non-stablecoin cryptocurrencies also experienced losses. Toncoin, the native token of the Open Network (TON), had the highest decline of 4.22% to US$2.20, resulting in a weekly loss of 3.98%. However, Toncoin still recorded a monthly rise of more than 50%.
Overall, the total crypto market capitalization dropped by 1.0% in the past 24 hours to approximately US$1.04 trillion. Despite the decline, trading volume increased by 8.42% to US$17.64 billion.
With the Fed’s hawkish policy stance and the anticipation of an interest rate hike, investors are treading cautiously in the cryptocurrency market. The performance of Bitcoin, Ether, and other cryptocurrencies will continue to be closely monitored as the market adjusts to these developments.
