Crypto market capitalization falls below $1 trillion

Total cryptocurrency market capitalization has fallen below the $1 trillion mark, according to CoinMarketCap.

As of writing, the figure stood at about $983 billion. Meanwhile, on CoinGecko, market capitalization remains above $1 trillion and has risen around 1.6% over the past 24 hours.

Bitcoin is currently hovering around $21,420, Ethereum above $1,460.

Earlier, Blofin analysts noted that the U.S. stock market had slipped somewhat, while the crypto market’s slide paused.

«But the next shock, sparked by a rate hike by the Fed in July, is not far off», Blofin said.

1/9. The U.S stock market fell to some extent today, whereas the crypto market stopped its losses. However, the next shock brought by the arrival of the Fed’s interest rate hike in July is upcoming. pic.twitter.com/4AGIMaRspC

— Blofin (@Blofin_Official) July 27, 2022

Analysts also pointed to the Fear & Greed Index. In their view, bearish sentiment in the crypto market is “relatively stable”.

5/9. The Crypto Market Fear & Greed Index rose back a bit today. The index continued to stay in the ‘fear’ territory. It seems that the bearish sentiments in the crypto market are relatively stable. @ResearchVariant pic.twitter.com/9GGir8SzCB

— Blofin (@Blofin_Official) July 27, 2022

It is expected that at the upcoming Federal Reserve meeting the policy rate will be raised by 75 basis points to 2.25–2.50%. The current level sits at 1.5–1.75%.

In March 2022, the Fed for the first time since December 2018 raised the policy rate by 25 basis points, to 0.25–0.5%. Bitcoin and the S&P 500 rose.

In May, the Fed raised the target range to 0.75–1% year-on-year, which surprised markets. In this context, the price of Bitcoin briefly surpassed the $40,000 level, but on the same day fell below $36,000, marking the start of a prolonged correction.

In June, the Fed sharply raised the policy rate by 75 bps to 1.50–1.75%. Bitcoin, which previously breached the $30,000 level on news of accelerating annual inflation, reacted by rising.

As a reminder, Galaxy Digital chief Mike Novogratz warned that the crypto market could remain in recession for another 18 months. In his view, the industry would see early signs of recovery after the Fed eases policy.

Investor Michael Burry, who predicted the 2007 housing crisis, forecast continued declines in Bitcoin’s price.

For details on how the Fed rate affects Bitcoin, read ForkLog’s cards.

Follow Bitcoin news on ForkLog in our Telegram — cryptocurrency news, prices and analysis.