Cryptos Plunge As Markets Digest Debt Ceiling Deadlock

Cryptocurrencies dropped more than 2.5 percent overnight amidst stalled negotiations to resolve the debt ceiling deadlock in the U.S. The FOMC minutes due later in the day also added to the bearish sentiment, dragging down world markets including cryptocurrencies.

Inconclusive negotiations between the Republicans who are seen as generally averse to raising taxes and Democrats who are generally seen as opposing spending cuts have raised the debt drama to a level that has fueled panic in world markets.

Solid jobs data and sticky inflation that has clouded the outlook for a pause by the Fed in the immediate future exacerbated the bearish sentiment. The probability assigned to a quarter percent rate hike by the Fed in the ensuing review, as implied by the 30-Day Fed Funds futures pricing data sourced from the CME FedWatch tool has jumped to 37.9 percent, from 28.1 percent just a day earlier.

A sea of red has descended on stock markets worldwide. Commodities, particularly gold and crude oil have however rallied. Bond yields have eased across regions as markets anticipate the future of both monetary policy and debt ceiling negotiations. The Dollar Index has meanwhile firmed up 0.10 percent overnight to 103.59, amidst rate hike fears and the debt ceiling drama’s effect on the U.S. Dollar.

Overall crypto market capitalization has dropped to $1.11 trillion, from $1.14 trillion a day earlier. More than 90 percent of the top 100 cryptocurrencies are trading in the overnight negative zone.

Bitcoin dropped 3.2 percent overnight and 0.8 percent over the past week. The leading cryptocurrency is currently changing hands at $26,382.01.

Despite overnight losses of 2.8 percent, Ethereum the leading altcoin is holding on to gains of 0.6 percent over the past week. Ether is currently trading at $1,797.45.

Bitcoin dominates 46.2 percent of the overall crypto market, followed by Ethereum which commands a 19.5 percent market share. All stablecoins account for 11.7 percent of the overall market leaving the residual alternate coins with a market share of 22.6 percent. BNB (BNB) commands 4.3 percent of the overall crypto market followed by XRP (XRP) that dominates 2.1 percent and Cardano (ADA) that enjoys 1.1 percent of crypto market share.

8th ranked Dogecoin (DOGE) topped the laggards list among the top 10 cryptocurrencies with an overnight decline of 3.8 percent.

26th ranked Toncoin (TON), 75th ranked IOTA (MIOTA) and 19th ranked UNUS SED LEO (LEO) are the only cryptocurrencies among the top 100 to have gained more than one percent overnight. TON tops with gains of 2.1 percent.

72nd ranked Pepe (PEPE) is the greatest laggard with an overnight decline of close to 14 percent. 45th ranked Fantom (FTM) has dropped more than 10 percent. 78th ranked Sui (SUI), 51st ranked Render Token (RNDR) and 85th ranked GMX(GMX) have all dropped more than 8 percent in the past 24 hours.

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