After a promising week of recovery, the crypto market’s fortunes turned, and have been declining over the last three days. However, the big tech firms now look set to determine the direction of the crypto market over the next few days.
Big Tech Firms Feel the Heat
In a year in which inflation and fears of recession are wreaking havoc on the global economy, the highly volatile crypto industry has been at the forefront of the losses, and the economic stress now looks to be taking a heavy toll on big tech firms.
The Big Five tech firms—Amazon, Apple, Google, Facebook, and Microsoft—which control 25% of the S&P 500 index’s market cap, are all expected to release their report earnings for Q2 before the end of the year.
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Google has already released its Q2 earnings report. In the Tuesday report, the global tech leader disclosed that it had suffered its slowest period of growth of the last two years during the second quarter of 2022.
Analysts expect the same to be true of the other four firms. Indeed, with all five firms facing difficulties and hinting that they are looking to cut costs, or planning to do so soon, there are growing concerns for the crypto industry
The crypto market plunge of 2022 is not an isolated event. The tech-driven S&P 500 and Nasdaq, which Bitcoin has developed a correlation with, have also plummeted by 18.5% and 26%, respectively.
Interest Rate Hike Looms: More Declines for Crypto?
The fear of further losses is intensifying, with the Federal Reserve reportedly preparing another aggressive rate hike in hopes that it help them get the record high inflation under control. The previous rate hike of 0.75 points resulted in significant sell-off in the crypto markets, prompting fears of a similar outcome this time around.
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Analysts expect the July 27th interest rate hike to be made at least 0.75 points, with many speculating more, further increasing the bearish sentiment over the crypto market.
On the Flipside
- Although Google’s revenue and earnings numbers were below par, the numbers were reportedly not as bad as investors had initially feared.
Why You Should Care
The crypto markets are in a critical price zone and could face major declines, depending on how the market absorbs the news from the coming days.
For more details on the interest rate hike, read:
Crypto Investors on the Lookout for the Fed’s Interest Rate Hike
Read about the impact of the decline on institutional investors below:
Institutional Investors Have Sold 236K BTC Worth $5.3 Billion Since Terra’s Collapse in May
