Central Banks' Aggressive Stance Weighs on Cryptocurrency Confidence

Central banks around the world are taking a more aggressive stance on monetary policy, which is affecting the cryptocurrency market's confidence.

The European Central Bank raised its deposit rate to 2.5% and left the door open for further tightening if inflation continues to rise.

This decision reflects investors' expectations of a more aggressive ECB over the coming months, with a 61% chance of another rate increase to 2.75% at the October 28 meeting.

The US also released its CPI data, showing an annual inflation rate of 3.4%, which is in line with expectations.

However, the data did not show a reduction in underlying inflationary pressures, and expectations for a more aggressive Federal Reserve continue to strengthen, with a 86% chance of interest rates rising to 4.00% at the September 16 meeting.

This environment may become increasingly challenging for cryptocurrencies as higher interest rates reduce liquidity and increase the attractiveness of stable markets.