Following the Federal Reserve’s move to raise interest rates by 75 basis points in order to battle excessively high inflation, the price of Bitcoin falls sharply. The biggest cryptocurrency by market capitalization dropped below $19,000 after the news before rising amid intense market turbulence.
The Fed’s latest rate hike on Wednesday afternoon was accompanied by a swift and unsurprising reaction from the cryptocurrency market. Prices of Ethereum and Bitcoin falls. This week has already been a difficult one for the cryptocurrency market. As of Monday, Bitcoin falls more than 10% week over week with regards to the Bitcoin Crash today.
Markets have often reacted negatively to rate hikes over the past year, and cryptocurrencies have closely followed macroeconomic developments. On Wednesday, the price of Bitcoin falls from around $19,500 to $18,900 in just a few minutes. Ethereum price fell by more than $50, but this was more modest. Both losses would imply a drop of more than 3% for him after the Fed’s announcement through a source of Bitcoin News.
After their collapse, Crypto price today bitcoin breaches briefly before falling again late Wednesday afternoon. Since then, neither token’s price has changed considerably, with Bitcoin remaining at roughly $19,000. Ethereum continues to float around $1,200.
Despite recent volatility, the price decline in response to the Fed’s rate move is minimal in comparison to decreases experienced in prior months. well? This is related to market expectations, according to experts. According to Joel Kruger, market strategist at LMAX Group, a financial technology company with offices in London that runs currency exchanges and cryptocurrency exchanges, “it’s all about expectations, not precisely what’s going on.” Things proceeded as predicted, with the exception of the initial price volatility, he added. “It’s not about what’s happening in regard to expectations.
How Should Crypto Investors Respond to Inflation and Fed Rate Increases?
The current state of the economy is making cryptocurrencies much more volatile than equities. Experts foresee significant price reductions in the cryptocurrency market due to further interest rate rises and the potential for a recession. If these impacts match those anticipated by the market, they could be transient. We advise staying away from selling while prices are down. Prices may fall in the upcoming months, particularly if inflation remains high following the Fed’s fifth rate rise. Invest no more than 5% of your portfolio in cryptocurrencies, experts advise, adding that you should only invest in what you can afford as cryptocurrency values are known to vary rapidly and unexpectedly.
Implication for the Crypto Market
Following the Federal Reserve Board’s decision, the cryptocurrency market has been erratic. Bitcoin plummeted below $19,000, then quickly rose to $19,500 before tumbling to $18,900. During Chairman Powell’s press conference, shares saw large swings. The S&P 500 and Nasdaq are trading close to Wednesday’s opening at the time of writing. In the near future, the market is irrational, according to Alexandre Lores, head of blockchain market research at Statistical Economics. According to crypto data provider Kaiko, “Long-term, we regard this as a neutral or negative move and expect BTC and ETH to display a neutral or bearish reaction.”
“We only noticed this last week, when the CPI announcement had a more significant price reaction than the merger” (of the Ethereum upgrade). Additionally, dealers set the price at
“Despite the Fed’s final interest rate being in the middle of the range of 4%, the market is still showing interest in the real on-chain yield.
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The Federal Open Market Committee (FOMC), which sets monetary policy, released a statement saying the latest data “pointed to modest increases in spending and manufacturing, supporting job gains that have been strong in recent months. will do,’ he said. Unemployment remains low.
The selection comes in response to last week’s release of August’s Consumer Price Index (CPI), which revealed inflation, which excludes energy and food costs, was down 0.6 million from the previous month. % rose Speculation According to the recently used CME tool FedWatch, expectations that the US Federal Reserve will raise rates by 100 basis points (100 basis points) were sparked by a worse-than-expected report . 18% chance.
Fears of an impending recession about Bitcoin Falls
When will Bitcoin Crash again ? The Federal Reserve is working to reduce inflation at a time when market uncertainty is pervasive and worries about a potential recession are growing. According to the Bureau of Economic Analysis’ GDP report, the U.S. economy contracted by 1.6% in the first quarter of this year. Many experts anticipate that the economy will continue to contract in the second quarter. Two successive quarters of falling GDP have typically been used to detect recessions.
The White House appears to have prepared the public for this news ahead of tomorrow’s release of this year’s second quarter GDP numbers. In a blog post last week, she discussed the issue before releasing a transcript of her interview. In response to a reporter’s question about tomorrow’s GDP pressure, President Biden declared on Monday that the United States would “not be in a recession.” Yesterday, his economic adviser Brian Deeds reiterated Yellen’s position in the White House Press Office.
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Cryptocurrency markets have responded positively to today’s surge, with both Bitcoin and Ethereum rising following the Fed’s statement. Bitcoin He Reaches $22,000, He’s Up 5% On The Last Day. Ethereum rose 11.6% on the day to around $1,550. The market capitalization of all cryptocurrencies has crossed the $1 trillion mark again after a recent surge.
why is bitcoin dropping today ? why is bitcoin going up today ? – Cryptocurrency Market crashes Due to the Amendments and changes made through federal reserve Especially for Ethereum And Bitcoin Price.