Collective rate hike announcements from the Federal Reserve, Bank of England (BoE), European Central Bank (ECB), and the Swiss National Bank (SNB) sent BTC and ETH prices tumbling over the last weekend, past Crypto Twitter’s psychological bottoms of $19,665 and $1,448 respectively, which represent the all-time-highs of the previous crypto bull cycle circa end-2017 / early-2018. BTC dipped as low as $17,760 over the weekend while ETH went to $897 before rebounding.
Prices of both major crypto assets were already on the decline throughout last week, as latest data indicated stubbornly high inflation despite fiscal tightening moves already undertaken by the Fed Reserve and several other central banks. Financial markets quickly reacted to the data with growing expectations of accelerated fiscal tightening, in particular for the Fed to hike rates by 75bps instead of the previously announced 50bps, and the monetary authorities duly obliged by the end of the week. By Tuesday (14th June), total crypto market cap had dipped below $1T, the first time it has been this low since Jan 2021.
On Sunday (19th June), the Crypto Fear & Greed Index hit its lowest point of 6 since August 2019.
Big leverage unwind in OTC markets over the weekend which resulted in a barrage of spot selling— Andrew Kang (@Rewkang) June 20, 2022
You got the liquidation cascade (it just wasn't in derivs)
A lot of pressure released, probably range a bit before seeing lower
Not in long term extreme value zone yet for spot buys
Reports of prominent crypto hedge fund Three Arrows Capital running into insolvency and being liquidated by their creditors last week exacerbated sentiments in the crypto market. Some accounts on Crypto Twitter suggested that the collapse over the weekend was also partly due to liquidations in the OTC market. Since Sunday, BTC and ETH prices have crept back up to ~$20,000 and ~$1,100 respectively, though total crypto market cap still remains below $1T at $945B.
With carnage across crypto markets, we take a look at some of the largest market indicators.