On July 16, the crypto market experienced a downturn due to rising US inflation and profit-taking by investors after a recent rally.
Overall situation in the crypto market
According to CoinGecko, the total cryptocurrency market capitalization fell to $3.78 trillion, down from about $3.91 trillion over the past 24 hours. Bitcoin dropped from around $120,000 to a low of $116,000. Ethereum also slid below the $3,000 mark, while XRP fell 5% from $3.02 to $2.78. Dogecoin suffered the greatest loss among major coins, tumbling 8%.
Impact of inflation and tariffs on the market
The rise in US inflation data also placed significant pressure on the market. The Consumer Price Index rose 2.7% annually and 0.3% month-over-month, marking the sharpest increase in five months. Threats from President Trump regarding the imposition of 100% secondary tariffs on countries continuing trade with Russia contributed to cooling expectations regarding potential cuts by the Federal Reserve.
Expert opinions and forecasts
Many analysts believe that the Fed should consider rate cuts, but this must be done cautiously. CEO of decentralized bank WeFi, Maksym Sakharov, emphasized that 'the Fed needs to follow the footsteps of the UK, but not as Trump expects.' It is also important to note that aggressive rate cuts could lead to market instability and a shift in investment into high-risk assets.
The decline in the crypto market reflects investors' reactions to economic factors such as inflation and rate forecasts. This may lead to changes in market dynamics in the short term.
