By Oliver Gray
Investing.com - Cryptocurrency markets have been a bloodbath for investors over the past week, tracking the biggest rout in U.S. equities since the initial coronavirus shock of March 2020, with market participants rotating away from riskier assets as the U.S. Federal Reserve flagged aggressive interest rate hikes and quantitative tightening this year in order to address surging inflation pressures.
Over the past week, Bitcoin has plunged 14% to 6-month lows of $US36,202, Ethereum crashed 25% to $2,400, Binance Coin lost 23% to $363, Cardano has fallen 34% to $1.038, Ripple lost 20.8% to $0.603 and Solana plummeted 35% to $89.72.
While traders are hoping for a psychological support level at $30,000 on the Bitcoin chart, they're also weighing the impact of further regulation on the crypto market after Russia’s Central Bank proposed to ban cryptocurrency investment and mining last Thursday, noting that “speculative demand” is driving the rapid growth of decentralized cryptocurrencies and risks creating a bubble in the market.
Investors are also closely watching for clues on how much the Fed will raise interest rates this year, with economists expecting a quarter-percentage-point rate hike in March ahead of the Federal Reserve's January meeting scheduled for Tuesday and Wednesday this week. Fed chair Jerome Powell will give a press conference on Wednesday afternoon after the policy-making Federal Open Market Committee releases its statement.