•The crypto market is down today due to the fallout from Silvergate Bank, a U.S. regulator-led lawsuit against KuCoin exchange, and hawkish comments from United States Federal Reserve chair Jerome Powell.
•Bitcoin price hit a monthly low on March 9 at $20,207 and Ether (ETH) also reached a monthly low at $1,425, suggesting that the bear market could be in control of prices.
•Interest rate hikes and expectations of a softening economy have weighed on risk assets while regulatory clampdowns have led to increased outflows in cryptocurrency markets.
Crypto Market Down After Fallout
The crypto market is down today after fallout from Silvergate Bank and a U.S. regulator-led lawsuit against KuCoin weighed on investor sentiment. Bitcoin (BTC) price hit a monthly low on March 9 at $20,207 and after the key $21,600 level was breached, traders are worried that a revisit of the bear market lows could occur. Similar worries exist for Ether (ETH) which also reached a monthly low at $1,425 leading analysts to suggest that the bears are in control of Ether price.
Hikes & Softening Economy Weigh On Risk Assets
On March 7th, Fed chair Jerome Powell suggested that economic data from Feb could show higher-than-expected uptick in inflation which would lead to faster tightening if data indicates so. Crypto prices remain highly correlated with major US indices like Dow & S&P 500 who remained lower ahead of an important Jobs report due on 10th March 2021 as well as most major banks expecting US to experience sharp recession in 2023 due to interest rate hikes & softening economy sentiment among investors .
Regulatory Clampdown Leads To Increased Outflows
The crypto market crackdown has spread to KuCoin with New York Attorney General Letitia James announcing lawsuit against major crypto exchange KuCoin alleging Ether being security trading on exchange without registration as broker-dealer leading to increased outflows in cryptocurrency markets along with recent enforcement action taken by Paxos & Binance plus SEC crackdown on centralized staking .
Risk Appetite Remains Low
Risk appetite amongst investors remain low amidst increasing regulatory pressure , economic data showing possible inflationary pressures & expected recession period indicating bearish trend prevailing over markets for time being .
Overall ,cryptocurrency markets remain under pressure amidst uncertain economic environment caused by rising inflationary pressures , regulatory clampdowns & anticipated recession period resulting into bearish trends over short term .