It was a sea of red in the cryptocurrency industry on Tuesday morning. After soaring to above $70,000 last week, Bitcoin tumbled to $67,000. This crash triggered a major sell-off in the altcoin industry.
Conflux (CFX), Axelar (AXL), BitTorrent (BTT), and Jasmy were among the worst performers as they crashed by over 12% in the past 24 hours. In most cases, altcoins tend to move in the same direction as Bitcoin.
Conflux price dived on Tuesday even after the Chinese government launched the Ultra Large Scale Blockchain Infrastructure Platform for the Belt Road Initiative. This means that the network will provide the public blockchain infrastructure to support cross-border cooperation among projects. This is notable since China is spending trillions of dollars in the BRI project.
Axelar Network is a blockchain infrastructure network that provides payment solutions for the Web3. It provides the same services as that Stripe does for the Web2 industry. Stripe powers the payment processes for most companies, including Uber, Etsy, Walmart, and Shopify.
Axelar token has crashed for two straight days and is down by over 33% from its highest point in 2023.
BitTorrent (BTT) token price has also plunged by over 33% from the YTD high. The same is true with JasmyCoin, the wildly popular cryptocurrency that is often seen as Japan’s Bitcoin.
The main reason why these altcoins dived on Tuesday is that Bitcoin was in a steep downward trend. There are signs that buyers are afraid of buying Bitcoin above $71,000.
The other reason is that there are signs that the Federal Reserve will deliver fewer rate cuts than expected. On Monday, the Institute of Supply Management (ISM) said that the country’s manufacturing PMI rose above 50 for the first time in two years.
Therefore, the Fed is contending with a situation where the economy is doing well while inflation remains stubbornly high. The headline Consumer Price Index (CPI) rose to 3.1% in February while the core CPI jumped to 3.8%.
These numbers are much higher than the Federal Reserve’s target of 2.0%. As such, most analysts believe that the Fed will deliver about two cuts later this year, lower than the previous estimate of three cuts.
Bitcoin and altcoins like Axelar, Jasmy, and BitTorrent tend to do well when there are hopes that the Fed will embrace a dovish tone. The same is true with the stock market, which explains why the key US indices like the Nasdaq 100 and S&P 500 dived on Monday.
