Crypto Market Pressured: Triggered By Interest Rate Policy And Gepolitical Heatup

The crypto market has experienced a significant decline in the last few days. (Photo; Doc. 247crypto)

JAKARTA - The crypto market has collapsed again, with the global market value dropping by more than US$100 billion (Rp1,600 trillion) in just the last 24 hours. Global crypto market capitalization has now dropped to US$2.05 trillion (Rp32,800 trillion), reflecting investor fears of global economic developments, monetary policy uncertainty, and increasing geopolitical tensions.

The prices of the two largest cryptocurrencies, Bitcoin and Ethereum, fell more than 4% respectively to a daily low of 58,207 US dollars (Rp931.3 million) and 2,513 US dollars (Rp40.2 million). In addition, other major cryptocurrencies such as BNB, SOL, XRP, TON, and ADA have also experienced a sharp decline, between 4-7%. This wave of sales hit not only the main currency, but also artificial intelligence and meme-based coins.

Speculation On Interest Rate Increase

Investors' concern is exacerbated by speculation surrounding a possible increase in interest rates by the Bank of Japan (BOJ) next year. While BOJ has confirmed there will be no interest rate hikes this year, risky yen trading still haunts the market. The recent launch of Bitcoin ETF has triggered investor transfer to cash trading, prompting further predictions of a wave of crypto market declines.

The former BOJ board member, Makoto Sakurai, indicated that the interest rate hike may not happen again at least until the end of this year. However, there is still uncertainty as to whether BOJ will raise interest rates in March, which will add to the pressure on the crypto market.

Geopolitics Heats Up And Fears Of US Recession

In addition to monetary policy, geopolitical tensions have also added to market instability. The continuing conflict between Russia and Ukraine, including the fire incident at Europe's largest nuclear power plant in Zaporizhia, Ukraine, exacerbated the situation. Tensions are increasing with reports suggesting a possible major attack from Iran in the coming days.

Meanwhile, Hindenburg Research's accusations against SEBI Chairman Madhabi Puri Buch, who is claimed to be involved in Adani's fund transfer scandal, are increasingly adding to the volatility of the crypto market. On the other hand, fears of a recession in the US are still looming, although some economists are optimistic about US economic resilience. The crypto market is now awaiting US job data and inflation this week, which is expected to affect monetary policy decisions by the Federal Reserve.

Crypto Market Today

Data from CoinGlass shows a weakness in the Bitcoin liquidity/order book map, which has the potential to hit prices of up to 56,800 US dollars (Rp908.8 million). If a strong rebound occurs, Bitcoin may test a higher level, but a weak rebound could trigger a deeper drop.

In addition, there is a risk of liquidation of US$2 billion (Rp32 trillion) in long BTC positions if prices drop below 58,600 US dollars (Rp937.6 million). In the last 24 hours, more than 61 thousand traders have been liquidated with a total of 166 million US dollars (Rp2,656 trillion), including the largest liquidation of US$2.17 million (Rp34.72 billion) in OKX, one of the leading crypto exchanges.