This morning, we are seeing a major market drop across the cryptocurrency industry. One of the big losers today is Ethereum Classic (ETC), which is down 16.36%, bringing the ETC rate to $33.95 (ETC/USD). What is causing this major bear movement for Ethereum Classic and the wider market?

A Falling Market

We are seeing numbers drop across the board for the crypto industry, with an overall decrease of 6.07% at the time of this writing. That brings the entire industry below $1 trillion in daily revenue as major selloffs occur. Bitcoin (BTC) is under $19,000 (BTC/USD), which hasn’t happened since June of this year. The BTC rate is continuing its bearish trend from yesterday. Things are looking dire for the market. So, what’s happening?

A large part of the drop can be blamed on two factors- interest rate hikes from the U.S. Federal Reserve and global inflation increasing. What’s worrying is that further interest rate increases are expected in the near future, which could mean we might be seeing these low crypto numbers for a while.

Risk assets have had a tough year overall, with stocks down for the most part. Bitcoin moves in relation to the stocks, much of the time, so a lot of what we are seeing from that coin is a response to what is happening in other financial markets. Of course, many crypto tokens respond to how Bitcoin is behaving as well. Bitcoin is down 5.87% this morning, and it’s very common to see other cryptos respond to Bitcoin price drops by dropping even further themselves.

What’s Going to Happen to Ethereum Classic?

As expected, Ethereum Classic’s trade volume is down right now, falling 18.71% over a 24-hour period. However, the ETC rate was way up yesterday. Starting on Monday, this coin surged 30.33% in 24 hours. The rate continued to stay high through yesterday, but it fell drastically late in the day on Tuesday.

Before the surge, ETC’s price was at $31.97. It rose to a peak for $41.84 then until dropping to today’s $33.95. So, the good news is that it has not fallen down to where it was before the surge. Even though the rate is down dramatically today, it is not actually down compared to last week. What we are seeing is more of a natural response to the early week surge rather than a devaluation of the ETC coin. It is likely to climb again very soon, especially in anticipation of the Merge coming up for the Ethereum platform.