Cryptocurrency sell off after Fed rate hike
The US Fed raised its policy rate by 75 basis points to 3.25%, in line with expectations.
Bitcoin (BTC), which moved slightly higher in intraday trading yesterday, saw an upward volatility before the Fed decision was announced, rising as high as $19,950. After the announcement of the interest rate decision, rapid sales came and Bitcoin fell to $ 18,100 with a loss of up to 9% from the peak level of the day until the close. At the opening of the day, the largest cryptocurrency started to move horizontally at $ 18,700 with partial purchases from $ 18,400 levels.
Ethereum (ETH) was up as high as $ 1,400 before the decision, but when downward volatility started, it saw a 13% loss and bottomed out at $ 1,220. Ethereum closed the day at $1,245.
There were also sharp declines across the market in a short time. Total market capitalization fell to $870 billion as fund outflows accelerated after the interest rate decision. With partial purchases from the lows during Asian trading hours, the total crypto market value recovered to $ 910 billion.
In his press conference after the announcement of the interest rate decision, Fed Chairman Powell said that while they need to leave inflation behind, unfortunately, there is no painless way to do this. This was perceived as a strong signal that tight monetary policies will continue to be implemented in the coming periods in the fight against inflation.
The current macroeconomic outlook leaves it unclear how long the depreciation in cryptocurrencies will continue. Some crypto commentators suggest that Bitcoin could fall to $10,000 by the end of the year. Some experts believe that crypto markets will not be able to break the Fed effect in the short term.
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