Cryptocurrencies were in the red, extending losses since last month’s peak.
Overall, the market has been able to rebound to a certain extent since the beginning of the year but could come under some pressure as traders could continue to secure their gains.
The market has been reacting to the legal challenges crypto companies have been facing in addition to changes in sentiment and monetary policy in the US in particular. This is especially the case with tax compliance for UK crypto earners who can start with a crypto tax calculator.
Denys Peleshok, Head of Asia at CPT Markets said, “The Federal Reserve has returned to raising interest rates after a pause and kept the door open for more tightening if necessary.
“While inflation has been declining in the US, the strength of the economy could leave some room for the central bank to raise rates again.
“This in turn could affect trader’s sentiment and could curtail risk-taking. Currently elevated interest rate levels could attract investors toward assets with fewer risks.
“At the same time, investors’ sentiment could be affected by the developments in economic activity. While the US economy has shown signs of resilience, European and Chinese economies were more mitigated.
“In the crypto market, the decline of Curve could constitute a risk for DeFi and could fuel caution among traders. The exploit and subsequent fall of the protocol could reignite fears of large-scale failures in other crypto assets.
“Such concerns could see investors favor bitcoin instead of other smaller cryptocurrencies and could help the largest crypto regain some market dominance after it stabilized around 50% of the total market value.”