Major coins continue to trade in negative territory as the global cryptocurrency market capitalization declined 3.5% to $1.81 trillion on Tuesday night.
What Happened: The apex cryptocurrency, Bitcoin BTC/USD, fell 1.85% to $41,632 over 24 hours. Over the last seven days, BTC has risen 2.14%.
Ethereum ETH/USD was down 3.62% to $2,841.82 over 24 hours at press time. The cryptocurrency has risen 3.34% over a seven-day trailing period.
See Also: How To Buy Ethereum (ETH)
Shiba Inu-themed Dogecoin DOGE/USD declined 2% to $0.20 over 24 hours. DOGE has fallen 1.57% over the week.
The top gainer in 24-hours was Axie Infinity, which rose 8.6% to $69.22 in the period. AXS has shot up 34.96% over a seven-day period.
The token associated with a blockchain-based game rose 10.93% and 12.34% against BTC and ETH, respectively.
Why It Matters: The debt ceiling standoff in Washington, D.C. spooked investors both in the traditional equities market and those in the cryptocurrency realm.
Meanwhile, Treasury yields have shot up to their highest levels since June after the U.S. Federal Reserve said it could begin tapering its $120 billion bond purchases program “soon.”
On Tuesday, Treasury Secretary Janet Yellen reportedly warned Congress that lawmakers must raise the debt limit by Oct. 18 or a government default will be triggered.
Brian Price, head of investment management for Commonwealth Financial Network said that the standoff is likely to be resolved as in the past but the current trading action is more a result of market sentiment.
“If interest rate increases moderate from here on the back of declining inflation expectations, then it wouldn’t surprise me to see the market resume its march higher as we move into the fourth quarter,” said Price, as per an earlier report.
Meanwhile, ETH’s fall below the $3,000 mark is leading to some traders finding ways to cut their losses.
ETH put options, expiring Oct. 8, have soared in trading volumes with a large number of put options observed around the $2,700 price level, which, if breached, could trigger long liquidations, CoinDesk reported citing data from Deribit, a cryptocurrency futures and options exchange.
“The market aggressively paid for over 13,000x contracts of Oct. 8 ETH puts since Asia morning, and front-end risk reversal skewed heavily toward puts once again,” said QCP Capital, a Singapore-based digital economy trading firm, as per CoinDesk.
“We remain wary of ETH downside for any near-term potential leg down,” said QCP Capital.
The BTC market cycle is not done, as per Amsterdam-based trader, Michaël van de Poppe, who tweeted, “It might feel like [that the cycle is over], but it's not. Because it feels like one, it's giving you a great opportunity to buy the dip, as often you'll be feeling uncomfortable to take a position. Scaling in here is fine.”
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