The Top Reasons for Today’s Dramatic Drop in Crypto Markets In Freefall

Crypto News: The Federal Reserve’s preferred inflation indicator, the Personal Consumption Expenditures or PCE, showed a stronger than expected rise in prices over the previous month. Both the U.S. stock and cryptocurrency markets fell significantly on Friday.
Fears of Inflation Rising
According to the U.S. Bureau of Economic Analysis’s PCE price index, the country’s inflation rate rose to 5.4% in January from 5.3% in December. The core rate of PCE inflation climbed to 4.7% for the first time in four years.


This figure is significantly higher than the 2% inflation target set by the Federal Reserve. These findings support the idea that the Fed may need to keep interest rates higher longer to reduce inflationary pressures. On a month-to-30 basis, both core PCE inflation as well as overall PCE inflation rose by 0.6%.
Expiry of Bitcoin Options
Bitcoin options contracts totaling $1.8 billion are about to expire, which could cause volatility in the short term price movement of BTC. Open Interest is the number of unresolved crypto derivative contracts. It has now reached 300,000.

Today at 16:00 UTC+8, BTC options worth $1.8b will expire. The Put/Call ratio of 0.66 is in effect and the largest pain point is $22,000. The number of BTC options positions has reached 309,000, which is second only to November 11, last year. The amount of Ethereum…
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— Wu Blockchain (@WuBlockchain), February 24, 2023

These Bitcoin contracts allow traders to forecast the price of Bitcoin by allowing them buy and sell options called “call”, and “put” at a specific price at a particular expiry date. These contracts’ historical performance is often used to predict future price movements by using ratios.
Read more: Check out the Top 10 DeFi Loan Platforms of 2023
Market Reaction

The Dow Jones Industrial Average fell by 472 points. This is equivalent to a 1.4% drop. The S&P 500 index and Nasdaq composite also saw a decline of 1.6%, 2.0% and respectively. Companies that are exposed to cryptocurrencies such as Coinbase (COIN), Microstrategy(MSTR), Robinhood, (HOOD), Riot Platformss (RIOT), and Robinhood (HOOD) saw a sharp decline in share values.
The total market capitalization of crypto market fell by 3.27% over the previous day, dropping to $1.06 trillion as of the time of writing. The flagship digital asset Bitcoin (BTC), is currently trading at $23,190, while Ethereum’s price (ETH) shows a decline in price of 0.81% over one hour and a drop in price of 3.40% over 24 hours. At the time of publication, it is currently trading at $1,595
Also read: Hedera Transactions Rise to Record High, Bullish Bullish HBAR Prices Action Coming?

About the author

The content presented may contain the author’s personal opinion and is subject to market conditions. Before investing in cryptocurrency, do your market research. The publication or the author are not responsible for any financial loss.

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