Cryptocurrencies have been in a bear trend since mid-August after they failed to break above the $1.2 trillion market capitalization resistance. Even with the current bear trend and a brutal 25% correction, it has not been enough to break the three-month-long ascending trend.
The crypto markets’ aggregate capitalization declined 7.2% to $920 billion in the seven days leading to Sept. 21. Investors wanted to play it safe ahead of the Federal Open Markets Committee meeting, which decided to increase the interest rate by 0.75%.
Total crypto market cap, USD billions. Source: TradingView
By increasing the cost of borrowing cash, the monetary authority aims to curb inflationary pressure while increasing the burden on consumer finance and corporate debt. This explains why investors moved away from risk assets, including stock markets, foreign currencies, commodities and cryptocurrencies. For instance, WTI oil prices ceded 6.8% from Sept. 14, and the MSCI China stock market index dropped