Cryptos Slide Amidst The Dollar's Rebound

Cryptocurrencies declined close to a percent in the past 24 hours amidst the Dollar’s rebound. Anxiety ahead of a speech by Fed Chair Jerome Powell that is expected to provide fresh insights to the Fed’s monetary policy thinking lifted the Dollar higher. Despite a monthly report that showed a cooling job market, uncertainty remains about the Fed’s interest rate trajectory and when it would actually cut rates from the current 22-year high. The recent verdict where Sam Bankman Fried was held guilty of the fraud at the FTX cryptocurrency exchange also weighed on overall crypto market sentiment.

The Dollar Index, a measure of the Dollar’s strength against a basket of 6 currencies gained 0.38 percent from the previous close to trade at 105.61.

Overall crypto market capitalization is currently at $1.32 trillion versus $1.33 trillion a day earlier.

Bitcoin slipped 0.84 percent overnight to trade at $34,709.35. The 24-hour trading range was between $35,271.56 and $34,545.82.

Ethereum too declined 1.2 percent in the past 24 hours to trade at $1,874.10. Ethereum traded between $1,914.58 and $1,868.48 in the past 24 hours.

BNB (BNB) regained fourth slot overall despite the overnight decline of 0.5 percent. BNB is currently trading at $247.85.

5th ranked XRP (XRP) declined 3.1 percent in the past 24 hours and is changing hands at $0.6854.

Solana (SOL) however recorded strong overnight gains of 4.1 percent to trade at $41.89.

All the top-10 non-stablecoin cryptocurrencies are now trading with year-to-date gains.

Polygon (MATIC) ranked 13th overall is the highest ranking crypto to trade with year-to-date losses. MATIC has slipped 6.1 percent in 2023.

96th ranked Blur (BLUR) gained close to 13 percent followed by 31st ranked Cronos (CRO) that added more than 8 percent.

67th ranked Trust Wallet Token (TWT) recorded an overnight surge of more than 7 percent. TWT has gained more than 57 percent in the past week, helping achieve year-to-date gains of more than 17 percent.

48th ranked Immutable (IMX) declined 8.1 percent followed by 37th ranked NEAR Protocol (NEAR) that slipped 6.9 percent in the past 24 hours.

The Bank of England on Monday published a discussion paper on the regulatory regime for systemic payment systems using stablecoins and related service providers. The proposed regulatory regime aims to maintain confidence in money and payments that is considered as core to preserving financial stability and focusses on sterling-denominated stablecoins.

Meanwhile, a recent report by Moody’s Analytics has revealed that large fiat-backed stablecoins de-pegged more than 600 times in 2023. The de-pegs, which have been defined as the price of stablecoins fluctuating by more than three percent in a day against their fiat currency peg, exceeded 700 in the corresponding period of 2022. The report adds that de-pegs are remarkably common among stablecoins and seen for a host of macro and coin-specific factors.

Moody’s Analytics also launched an AI-enabled Digital Asset Monitor to track the volatility and risk in the Decentralized Finance space, using a unique range of data sources. The Digital Asset Monitor, which is not linked to Moody’s Ratings business and is not a credit rating, is designed to signal the probability of a stablecoin de-peg from a fiat currency over a 24-hour time horizon. The launch version of DAM would track 25 fiat-backed stablecoins, including Tether, USDC, and PayPal Coin, representing over 92 percent of the total stablecoin market capitalization, backed by most major fiat currencies. DAM would progressively add other digital assets to the platform.

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