Even though the FOMC meeting was over, the crypto market is still in red. Bitcoin is moving towards $35,511 and altcoins too are suffering.
Bitcoin responded to the Federal Reserve’s 50 basis-point interest rate hike by dropping more than 10% in one day, its most significant decline in two months.
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Most of the crypto market was up early today, with bitcoin hitting $40,000 after yesterday’s Federal Reserve meeting. Avalanche and Solana were among other cryptocurrencies to perform well in the opening hours.
All cryptocurrencies saw significant drops, even Bitcoin. BTC dropped 10% while altcoins saw an even greater drop.
Ethereum, the second largest cryptocurrency after Bitcoin, fell 7.8%. Other altcoins experienced a significant decline as well. DOGE dropped 5.4%, while SAND lost 11.8% in 24 hours.
After a rejection of $40,000 last week, the cryptocurrency landscape became bearish and quickly dropped below that level. The result was a near two-month low at $35,511 per coin.
Yesterday’s report said that the asset fell to below $39,000, and then it dropped back below $38,000.
Bitcoin traded at $38,500 just before the FOMC meeting. Jerome Powell, Fed Chair, stated that the Fed would increase interest rates 50 basis points instead of the 75 expected.
The stock market soared as a result. Bitcoin also reached an intraday record of $40,000. As per Jarvis Labs:
(…) the fair price scanner started showcasing potential local bottoming after alerts last night. But, FOMC/trad fi predicts that they will likely play along to provide market relief next week. We might get the next-up if there is any sign of dovishness. Then, a little more crab is ok. Volatility may go one way or the other.
Bitcoin price affected by the U.S Stock Market
However, the stock market couldn’t hold the rise and fell into a decline. Bitcoin lost over 10% after the US stock market rally. The total market value of Bitcoin is now at $692.6 million.
Stocks are also affecting cryptocurrencies. Investors seem to be selling off their stocks, causing a “risk-off” trade. The market has seen a sharp drop in cryptocurrency prices.
Even with positive news such as the DDoS attack that was launched against cryptocurrency, Congress has begun to consider allowing companies including cryptocurrencies into their 401(k). The fall in stock markets is dragging down the cryptocurrency value. Additionally, because tokens are volatile, it means losses in cryptocurrency markets can be more severe than those in stock markets.
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It is always changing what cryptocurrencies can do. Thursday’s changes seem regular. If you are a cryptocurrency investor, then you might know that the price of these investments can fluctuate greatly. As it stands, cryptocurrency value has been affected somewhat by the stock market’s recent fluctuations.
Featured Image from Pixabay, and Chart from Tradingview.com
