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▲ Crypto (Cryptocurrency) ©CoinReaders
The cryptocurrency market is once again being shaken by macro shocks. With the possibility of additional tightening by the U.S. Federal Reserve (Fed) highlighted, the total market capitalization fell by 0.82% in 24 hours, and tension is growing in the market over whether the $2.52 trillion support level will break.
According to CoinMarketCap, a cryptocurrency market tracker, on May 27 (local time), the total cryptocurrency market capitalization fell to approximately $2.52 trillion that day. The hawkish remarks by U.S. Federal Reserve (Fed) Governor Lisa Cook were identified as the main reason for the market's decline. Governor Cook stated that she is prepared to raise interest rates if inflation persists above the target of 2%, and this was analyzed as increasing selling pressure across risk assets.
The media reported that the correlation between the cryptocurrency market and gold prices recently rose to about 60%. This trend is interpreted as investors approaching cryptocurrencies more as an inflation hedge asset rather than a growth asset. However, it was explained that in a high-interest rate environment, the appeal of holding cryptocurrencies, which do not yield interest, may decrease, leading to increased pressure for institutional fund outflows.
The altcoin market's weakness also fueled the broader decline. SuperFortunes (GUA) plummeted by approximately 40% in a single day due to a $40 million token unlock, and Pendle (PENDLE) also fell by over 10%. This was analyzed as a sell-off phenomenon focused on high-risk altcoins, compounded by a decrease in overall market open interest and the spread of negative investor sentiment.
Technically, the current $2.52 trillion level is identified as a key support line. The media analyzed that this level coincides with a recent swing low. The Relative Strength Index (RSI) is currently at 34, indicating it has entered the verge of oversold territory, but a full-fledged rebound signal has not yet appeared. If the $2.52 trillion support level holds, the market could attempt to re-break the $2.57 trillion - $2.60 trillion resistance level in the short term, but if it breaks down, further correction to the next support zone of $2.43 trillion - $2.45 trillion could be possible.
An analysis also emerged that the market direction ultimately depends on U.S. inflation data and Fed policy. The media pointed out that the upcoming U.S. Personal Consumption Expenditures (PCE) price index and additional Fed statements will be key variables determining market volatility. Whether the cryptocurrency market will regain its independent upward momentum or continue its downward trend amid Fed tightening pressure is emerging as the biggest short-term focal point.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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