Bitcoin Price and Traditional Markets Continue to Fall as Fed Raises Chance of Interest Rate Hike
Over the past 24 hours, the price of Bitcoin has dropped to $35,130 at one point. The cryptocurrency hit a five-day low after a benchmark for most of the week as the dollar rose in value, similar to U.S. stocks and some commodities.
US Stocks Falling Again, Dragging Crypto Market with Them
At the time of publication, BTC is trading at $35,786, showing an increase of 1.78%.
The price of BTC and traditional markets continue to fall as the Fed thinks it will raise interest rates sooner than expected.
The leader of the Federal Reserve Bank of St. Louis, James Bullard, indicates that he expects the first interest rate increase to occur at the end of 2022.
Bullard predicted future inflation of 3% this year, and 2.5% in 2022, before falling back to the Fed’s 2% target.
Bullard’s comments were even more influential than those of Fed Chairman Jerome Powell last Wednesday, who indicated that a rate hike would occur in 2023. Powell’s comments triggered a wave of sell-offs in financial markets as the US dollar rose. At the time, Bitcoin, gold, and some U.S. stocks were falling steadily.
Today’s sell-off dragged BTC below the critical support of $36,000, prompting traders to predict $32,500 as the next stop before the BTC returns to the swing low of $30,000.
Moreover, this decline was not only due to the Fed. Fears of a further downturn for BTC have been growing for weeks, with much of the discussion focused on the impending death cross and its implications for the future of Bitcoin.
In addition, these technical factors, combined with the news that the Chinese authorities are shutting down crypto miners, or the recent criticism of Iron Finance offered by billionaire investor Mark Cuban, have made traders concerned about the current price drop.
As you can see, the crypto fear and greed index fell to 23, which indicates a strong fear and a continuation of the trend of last month.
After the Fed reset, the Dow Jones Industrial Average posted its worst week in six months. Big tech companies like Apple are also falling, pulling the tech-heavy Nasdaq 100 behind them. The S&P 500 and NASDAQ were also heavy, closing the day down 1.31% and 0.92%, respectively.
The Altcoin market Clearly Can’t Be Any Better
Ethereum synchronized with BTC records a drop of 4% for the day. Prior to that, ETH fell more than 13% to $2,137. However, according to CoinMarketRate, at the time of publication, the price rose slightly to $2,253.
The biggest drop of the day is likely to be on Amp (AMP) — down 33% from the all-time high of $0.1211 set on June 16.
The total capitalization of the crypto market is $1,511 billion, and Bitcoin’s dominance hovers at 44.8%.