Larger-than-anticipated inflation numbers are adding to negative sentiment on crypto market
Negative sentiment continues to dominate crypto assets as Coinshares reported negative outflows of $102 million last week. Bitcoin outflows were $57 million last week, bringing monthly outflows to $91 million. Ethereum recorded another week of outflows at $41 million, bringing the total outflows since the start of the year to $387 million. In anticipation of aggressive monetary policy, flows of investment products into digital assets have remained volatile.
Cardano and XRP, however, received minor positive inflows in comparison to the huge outflows seen for Bitcoin and Ethereum.
Stronger-than-expected inflation numbers are adding to negative sentiment in crypto markets, and the US Federal Reserve is poised to raise interest rates this week to curb cost growth.
In the past week, U.S. stocks sold off heavily, with the Nasdaq dropping sharply into a bear market. Bitcoin and other cryptocurrencies have a history of being linked to equities and other risky assets.
Cardano recovers 15%, XRP recovers 4%
Cryptocurrencies hit their lowest levels in 2022, due to a massive sell-off in risky assets. Additionally, crypto lending platform Celsius has halted withdrawals for its clients, raising concerns about contagion in broader markets.
The cryptocurrency market capitalization fell below $1 trillion on Monday for the first time since February 2021, recording $958 billion at press time, according to data from CoinMarketCap. Cardano dumped as much as 20% to touch lows of $0.435 before rebounding strongly.
At press time, Cardano was trading down 15% at $0.505. XRP also fell to lows of $0.293 before rebounding almost 4% to trade at $0.31 at press time.
Ripple CEO Brad Garlinghouse, speaking on the market downturn, assures investors that it will probably only be temporary. “Days like today are never what you hope to see, especially in an industry with as much incredible talent as crypto.” If you recently joined the industry and haven’t seen a downturn like this, know that this too shall pass (advice from someone who’s seen a few downturns over the years).”
