Ethereum plunges 13%, down more than Bitcoin after Fed spooks crypto markets
Ethereum’s native token, Ether (ETH), plunged sharply hours after the United States Federal Reserve released the minutes of its December meeting, showing that it eyes a faster timetable for hiking interest rates in 2022.
The minutes showed that the Federal Open Market Committee (FOMC) is in favor of raising short-term rates “sooner or at a faster pace than participants had earlier anticipated.” According to the CME Group, trading in the interest-rate futures market showed a two-thirds possibility of the first increase in March.
Ether turned lower after the minutes were released, dropping by over 13.50% to as low as $3,300. Its plunge mirrored similar downside moves across the crypto market, with Bitcoin (BTC) shedding a little over 9% to nearly $42,100.
Incontestably, ETH/USD returned more losses to its investors than BTC/USD after the Fed’s announcement.
It appears traders decided to unwind tokens sitting atop better long-term profits than Bitcoin. For instance, Ether’s returns in the last 12 months — even after the Fed-led drop — came out to be around 175%. On the other hand, Bitcoin’s profits were nearly 15.75% in the same period.
Similarly, Ether’s top rival, Solana (SOL), also logged more losses than Bitcoin, dipping by more than 13.75% after the Fed’s news. Nonetheless, its 12-month profits came out to be more than 7,500%, signaling further extreme corrections if the crypto market’s bias remains skewed toward bears.
Ether also plunged against Bitcoin, according to the performance of a widely traded instrument in ETH/BTC in the past 24 hours.
The pair dropped by a little over 5% to hit 0.077 BTC. In doing so, it also reached a critical support level near 0.078 BTC that has recently been instrumental in keeping Ether
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