The cryptocurrency market turned red even after the recent Federal Open Market Committee meeting. Bitcoin is an inch towards the $35,511 mark, altcoins are also taking a beating.
Bitcoin responded to the Fed’s 50 basis point rate hike by dropping more than 10% in one day, its biggest drop in two months.
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Most of the cryptocurrency market was higher early today, with Bitcoin hitting $40K after yesterday’s Federal Reserve meeting. Other cryptocurrencies that performed well in the early hours are Cardano, Solana, Polkadot, and Avalanche.
The afternoon market fell, and all cryptocurrencies, including Bitcoin, recorded a significant decline. BTC is down 10%, while altcoins have also seen a big drop.
The second largest cryptocurrency, Ethereum, fell 7.8%; Other cryptocurrencies have also experienced significant declines. For example, DOGE is down 5.4% in the past 24 hours while SAND is down 11.8%.
As the cryptocurrency scene was bearish last week after being rejected at $40K, it quickly retraced below that level and continued to lose value. This brought it to a near two-month low of just under $35,511 per coin.
Yesterday, it was reported that the asset failed to stay above $39,000 and eventually fell below $38,000 again.
Bitcoin was trading around $38,500 ahead of the Federal Open Market Committee meeting. Fed Chairman Jerome Powell said that the institution will raise interest rates by 50 basis points (instead of the expected 75).
This news caused the stock market to rise. Bitcoin also jumped to an intraday high of $40,000. According to Jarvis Laboratories:
(…) The Fair Price Scanner has started showing the potential local low after last night’s alerts. However, they expect the FOMC/trad-fi will likely play a role in comforting the market this week. Any slight caution sign and we could see the follow-up. And if not, do more crab or hard drop. The volatility can go either way.
Impact of the US stock market on the price of Bitcoin
Unfortunately, Stock market It couldn’t hold its own and started a downtrend. Bitcoin also followed the rally in US stocks and lost more than 10% of its value. This brings its total market value to more than $692.6 billion.
Cryptocurrencies are affected in the same direction as stocks. It appears that investors are selling their shares, causing a “risk-free” trade. This caused a sharp drop in the cryptocurrency market.
Despite the many positive news like a DDoS attack against cryptocurrency bustedCongress is considering allowing companies to include cryptocurrency in their 401(k) plans; The bearish stock market is dragging cryptocurrency values down with it. In addition, the volatility of the tokens means that when the stock market drops, losses are generally more severe in the cryptocurrency market.
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Cryptocurrencies are constantly changing. Thursday’s changes appear to be regular. People who invest in cryptocurrencies may understand that the value of these investments can go up and down dramatically. However, as things stand, what has changed in the past six months is that stock market values are beginning to affect the values of cryptocurrencies.
Featured image from Pixabay and the chart from Tradingview.com