Ethereum tumbles amid crypto selloff as traders assess rate uncertainty

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Ethereum fell 7% and bitcoin 3% in less than 30 minutes on Wednesday morning. Altcoins are also taking a hit, with solana and polygon down 8% and 5%, respectively. It’s unclear what led to the selloff, but markets were sensitive to signs of central bank tightening. LoadingSomething is being loaded.

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Ethereum fell 7% on Wednesday amid a broader crypto market selloff as traders navigate a murky environment.

Bitcoin fell almost 3% in less than 30 minutes early this morning, according to Messari. Meanwhile, altcoins are also taking a hit, with solana and polygon down 8% and 5%, respectively.

While it’s unclear exactly what drove the downward price trend, markets have been sensitive to signs of central bank tightening.

The Federal Reserve has consistently raised rates for more than a year to combat high inflation for decades, and it is widely expected to raise rates another 25 basis points next month.

Overseas, consumer price index data indicated that UK inflation remains above single digits, meaning the Bank of England may have to raise interest rates further .

“After last month’s shock CPI reading, today’s print still shows double-digit inflation,” Giles Coghlan, chief market analyst at financial services firm HYCM, told Insider. in a press release. “It’s a sign that inflation is not yet back on track and that the long-awaited drop to pre-Covid levels is not quite there.”

Coghlan added: “The question investors will be asking now is where does the Bank of England go from here?”

Other experts said recent inflation data did not play into the market slowdown. Rather, it was a large crypto holder, commonly referred to as a “whale”, offloading a massive position on an exchange.

“It may have been caused by a whale that sold around 16,000 BTC on Binance in the marketplace,” Timothy T. Shan, COO of decentralized exchange Dexalot, told Insider. “This then triggered an overall reduction in risk among longs (including leveraged longs) in the market.”

Alex Altgausen, CEO of blockchain gaming startup Banksters, pointed out that Binance allows withdrawal of staked ether after the latest Ethereum software update.

“The decline in ETH prices can be attributed to the activation of the cancellation of ETH on Binance. After years of waiting, people are now able to withdraw and sell their profits, which contributes to lower prices,” Altgausen told Insider.

Volatility has returned to the market after months of bullishness for digital assets.

Ethereum hit an 11-month high after its highly anticipated Shanghai upgrade, also known as “Shapella,” last week. Elsewhere, bitcoin hit a 10-month high and soared 39% in the past three months.

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