Amid the sharp decline in the prices of most cryptocurrencies, the total market cap has dropped below $1 trillion.

The chart below shows the current value of $953 billion comparable to the end of January 2021.

On the night of June 14, the indicator fell below the level of 900 billion dollars.

Analysts at Blofin attribute the turbulence in financial markets to the decline in confidence in risky assets against the backdrop of accelerating inflation in the US and measures to tighten monetary policy.

2/8. According to data provided by the CME FedWatch Tool, the probability of a 50bps rate hike in June and a 75bps rate hike in June is 67.8% and 32.2%, respectively. Moreover, the probability of a 75 basis point rate hike in July is already 83.5%. @CMEGroup @4adybug pic.twitter.com/rPuIY5pU6k

— Blofin (@Blofin_Official) 13 June 2022

CME FedWatch data points to the possibility of a 75 basis point increase of 67.8% for the Fed’s 50 basis point hike in June, 32.2% for a 75 basis point increase and 83.5% for July.

Annual inflation in the United States in May reached 8.6%, the highest since December 1981.

3/8. Higher-than-expected May inflation data on Friday shook investors, as they worried that rising inflation would plunge the economy into recession. The stock market was full of pessimistic sentiments and therefore dropped significantly today. @Yahoo Finance @ResearchVariant pic.twitter.com/C5DD7YCYnE

— Blofin (@Blofin_Official) 13 June 2022

“The higher-than-expected numbers have alarmed investors. “They were worried that rising inflation would push the economy into recession,” he said.

4/8. 2-year U.S. Treasury yields rose above 3.22%, the highest since 2007, and were briefly higher than the 10-year yield as investors bet the Fed may need to take more aggressive action to curb inflation. This yield curve inversion was seen as indicative of a recession. pic.twitter.com/ljsNT6VSyE

— Blofin (@Blofin_Official) 13 June 2022

The 2-year Treasury yield hit 3.22%, the highest level since 2007. The value briefly exceeded the value of 10-year Treasury bonds.

In any case, investors fear the Fed will take more aggressive measures to curb inflation. An inverted yield curve often signals an impending recession.

According to CoinGecko, at the time of writing, Bitcoin is trading around $22,390 while Ethereum is trading around $1,220. Price reductions compared to the highest prices in the past were 67.4% and 74.9%, respectively.

Former BitMEX CEO Arthur Hayes discovered A significant concentration of open interest in options on the Deribit exchange at $20,000 and $1,000 for Bitcoin and Ethereum, respectively. According to him, prices falling below the determined levels create great selling pressure on the spot markets.

Recall that on June 13, the bitcoin price dropped more than 17% on the day, dropping below $23,000.