Terra, Solana, XRP Struggling to Recover as Bitcoin Erases Recent Gains

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Alex Dovb­nya

The cryp­tocur­ren­cy mar­ket is once again in lim­bo after Bitcoin’s failed recovery 

The cryp­tocur­ren­cy mar­ket is in the dol­drums fol­low­ing Bitcoin’s most recent bout of high volatility. 

Solana (SOL), Ter­ra (LUNA), Polka­dot (DOT) and Rip­ple-affil­i­at­ed XRP are all down rough­ly 6% over the past 24 hours, accord­ing to data pro­vid­ed by CoinMarketCap.

Theta Net­work (THETA) is the only promi­nent cryp­tocur­ren­cy that has man­aged to buck the trend, soar­ing 24%. 

On Feb. 10, the price of Bit­coin peaked at $45,821 on the Bit­stamp exchange, stag­ing an impres­sive come­back after tak­ing a hit from the high­er-than-expect infla­tion rate. Anoth­er sharp increase in con­sumer prices will embold­en the U.S. Fed­er­al Reserve to launch an even more aggres­sive rate hike cam­paign. Bank of Amer­i­ca sees the Fed increas­ing the bench­mark short-term inter­est rate at least sev­en times in 2021.

Mar­ket ana­lyst Alex Kruger attrib­uted Bitcoin’s out­per­for­mance to the “sound mon­ey” nar­ra­tive sur­round­ing the cryptocurrency.

Yet, the cryp­tocur­ren­cy mar­ket took anoth­er bear­ish turn after St. Louis Fed­er­al Reserve Pres­i­dent James Bullard came out in favor of the first 50 basis points rate hike since 2000. Gold­man Sachs now fore­casts that the Fed could hike rates by 25 basis points at each of the upcom­ing meet­ings through­out 2022:

We see the argu­ments for a 50bp rate hike in March… So far, though, most Fed offi­cials who have com­ment­ed have opposed a 50bp hike in March. We there­fore think that the more like­ly path is a longer series of 25bp hikes instead.

On Feb. 11, the price of Bit­coin slipped to an intra­day low of $42,600, drop­ping rough­ly 7% from the recent high.

BTC
Image by tradingview.com

The biggest cryp­tocur­ren­cy is down 37.56% from its record peak of more than $69,000.

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