It was a sea of red in the crypto market on Tuesday morning as investors remained concerned about the Federal Reserve and geopolitics. Bitcoin price crashed to $63,000 while Solana plunged to $135 from the year-to-date high of $210.
Monero price was trading at $122, higher than the weekend low of $105.85 while Quant (QNT) retreated to $103 from Monday’s high of $115. Other altcoins like Hedera Hashgraph, Immutable X, Ethena, Starknet, Jasmy and VeChain also plunged.
Monero, Jasmy, and Quant prices
US dollar index and the VIX
A closer look at the broader market shows that the plunge of crypto prices is happening at a time when investors are getting quite worried and are moving to safe havens.
Data shows that the US dollar index (DXY) , which weighs the greenback against other currencies, continued its uptrend. It has jumped in the past five straight days and is trading at its highest level since November last year.
The US dollar has jumped against most currencies. It has risen sharply against developed country currencies like the euro, sterling, and the Japanese yen. Similarly, it has soared sharply against emerging market currencies like the Malysian ringgit, Chinese yuan, and the Philippine peso.
Meanwhile, the VIX index has also gone parabolic in the past few days. It soared to almost $20 on Tuesday morning and is approaching its highest point since October last year. The index is up by over 60% from its lowest point this year.
In most periods, the VIX and DXY indices rise sharply as investors move from riskier assets to safe havens. This also explains why the American stock market is in a freefall. The Dow Jones index retreated by 245 points on Monday while the Nasdaq 100 rose by 280 points.
Why altcoins are falling
Therefore, there are several reasons why the prices of altcoins is in a strong freefall. First, investors are moving from riskier assets to safe havens. That explains why the price of gold has soared to an all-time high this year.
Second, there are concerns about Bitcoin, which has formed a triple-top pattern ahead of the halving event. This price action is a sign that the coin could retreat sharply as investors sell the halving news. Besides, they have already pushed BTC from below $20,000 in 2022 to over $60,000 today.
Third, altcoins are in a freefall because of the rising geopolitics issues that could lead to higher inflation in the coming months. Data shows that energy and industrial metals prices have been in a strong uptrend in the past few weeks.
Finally, traders are also focusing on the earnings season in the United States. Banks like JPMorgan, Morgan Stanley, Citigroup, and Blackrock have all retreated after publishing mixed financial results recently.