It seems that the big cryptocurrencies are still suffering from the repercussions of the US Federal Reserve’s decision, at a time when the altcoins of cheap value took off against expectations.
During these moments of trading, today, Thursday, the digital currency market witnessed a phenomenon that rarely occurs, as the two largest digital currencies, Bitcoin and Ethereum, faltered, while altcoins launched in a wave of collective gains.
The market for digital currencies and high-risk assets suffered from violent pressure amid market expectations of the US Federal Reserve to tighten further during the last period, which was confirmed during Wednesday’s meeting.
During this period, the correlation between the US stock market and the cryptocurrency market increased in light of the rise in the attractiveness of the dollar, which prompted the risk appetite to move away from assets fraught with high volatility.
Although the markets had finished pricing the Fed’s move last week to increase interest rates by 75 basis points, Powell’s comments regarding continued tightening, and that it is still too early to talk about monetary easing, pushed the markets to more volatility.
Cryptocurrency market analysts see that traders are heading towards the exodus of major currencies that have seen an increase in the correlation between their movements and other assets such as gold and stocks.
On the other hand, traders are heading towards small and cheap digital currencies, which have a high degree of volatility that may allow more rise during the coming period.