Frank Chaparro says Bitcoin is no longer driving the market as it used to

The cryptocurrency market has not been performing well in recent weeks. The price dip has triggered liquidations across the market, with the crypto market cap falling below $2 trillion. Frank Chaparro, the Block director of news, noted that this dip could be attributed to the recent announcement by the US Federal Reserve.

In a recent interview with CNBC, Chaparro noted that billions of dollars worth of crypto had been liquidated across the cryptocurrency market in recent weeks.

Bitcoin is no longer driving the market

Chaparro noted that the price of Bitcoin (BTC/USD) was no longer affecting the broader cryptocurrency market. In its earlier years, the volatility in the crypto space was usually triggered by the volatility in BTC prices. However, this is no longer the case.

While most cryptocurrencies are recording dips, some are still recording an increased number of inflows. Chaparro noted that inflows to Solana (SOL/USD) had increased significantly over the past week.

Additionally, the non-fungible token (NFT) sector has also been gaining despite the recession in the broader market. OpenSea, the largest NFT marketplace, has seen increased interest in NFTs, with the platform being on track to reaching a new all-time high in its monthly trading volumes.

Nevertheless, Chaparro noted that the price of Bitcoin was still important as it could stifle or fuel the growth of the cryptocurrency sector. He noted that hedge funds and other institutions are lured towards crypto investments during a Bitcoin bull run, which is not the case when the prices fall to the current levels of around $40K.

Fed announcement attributed to market bears

The recent bearish trend across the broader cryptocurrency market has been attributed to a recent announcement by the US Federal Reserve. Currently, the total crypto market capitalization stands at around $1.99 trillion, which is a major dip given that the same stood at $3 trillion during the market peak in November.

The US has been facing rising inflation levels, with the level estimated to be the highest in forty years. To curb any further rises, the Fed has hinted at raising the interest rates before the end of Q1 2022. This has affected Bitcoin’s price that is believed to be a hedge against inflation.

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