The crypto market in the third week of 2022 still tends to be sluggish and has not risen like in November 2021. The sluggish crypto market is known to have occurred in early 2022 trading.
There are at least five cryptocurrencies with large market caps (big cap) for two weeks in 2022 (year-to-date / YTD) experiencing corrections of up to a dozen percent. In fact, some have been corrected up to 21%.
The five big cap cryptocurrencies that have been corrected by a dozen percent are Bitcoin, Ethereum, Solana, XRP, and Terra.
Based on data from CoinMarketCap, Solana had the worst correction in more than two weeks, falling 21%, followed by Terra, which fell 14.82%. As for the two ‘jumbo’ cryptocurrencies, Bitcoin and Ethereum, both fell by 11.3% and 14.44%, respectively.
The following are the movements of five big cap cryptocurrencies for more than two weeks.
The lack of enthusiasm for crypto to the November 2021 level occurs because negative sentiment on global financial markets still tends to outnumber positive sentiment.
The first negative sentiment is global inflation which is still rising, especially in the United States (US).
Last week, the US Consumer Price Index (CPI) in December 2021 showed a 7% jump on an annual basis, the highest reading in four decades.
Meanwhile, the US Producer Price Index (PPI) in December 2021, which was released the next day, reflected an increase of 9.7% compared to the same period last year. However, the results were better than some investors had feared.
The rebound in inflation in Uncle Sam’s country made the market suspect that the US central bank (The Federal Reserve / the Fed) would be more hawkish going forward, where they also predicted that the Fed would raise its benchmark interest rate sooner than previously predicted.
The market’s suspicion of the Fed’s increasingly hawkish attitude had also caused the yield of 10-year Treasury bonds to rise to the range of 1.7%, and even almost touched 1.8%.
Higher interest rates are designed to prevent inflation from spiking further.
However, one of the effects on capital markets is that the policy will hit speculative assets such as stocks and possibly cryptocurrencies, as investors opt for safer investments such as US government bonds.
Apart from inflation and the potential for the Fed’s hawkish attitude, the development of the corona virus (Covid-19) pandemic is also still a burdensome sentiment for crypto movements.
The number of new infections in the world in recent weeks according to the World Health Organization (WHO) has crossed the 15 million mark per week.
This was driven by the emergence of the Omicron variant. In fact, the strain that was first detected in South Africa (South Africa) and Botswana has replaced the Delta variant.
“The large number of cases is weighing on the health care system,” said WHO Technical Lead for Covid-19 Maria Van Kerkhove, at the latest press conference last Wednesday (12/1/2021).
“Even though Omicron isn’t as bad as Delta, it’s still putting people in hospital, still getting people into the ICU and needing further clinical care. He (Omicron) is still killing people,” he added.
On the other hand, investors also tend to hunt for other digital assets that are still related to crypto, namely non-fungible assets or NFTs.
In fact, the rapidly increasing trend of NFT makes the price of Ethereum tend to be positive, because the majority of NFTs use Ethereum as a crypto reference. But this turned out to be unable to help Ethereum return to its November 2021 range.