With the latest announcement of an interest rate hike of 50 basis-points from the U.S. Federal Reserve, the crypto market crashed, washing off all the gains it made prior to the announcement. The Fed stated that it is likely fair to raise rates again at the current rate of increase. After increasing rates by 75 bps for several months due to inflation worries, today’s announcement came as a slowdown to rate hikes.
The crypto market along with the stock market crashed significantly after the Federal Reserve announcement. At the time of writing, the price of Bitcoin and Ethereum fell by over 2.7% in the past thirty minutes and currently trade at $17,790 and $1305 respectively.
Additionally, the Bitcoin Fear and Greed Index has fallen to levels of “fear” and is expected to increase further to “extreme fear” in the coming days.
There is also a growing fear among the crypto community on the back of the market dip, as the BTC price rally seems to have lost steam.
Many expected a relief rally to commence after the Fed announcement today, but it seems like all hopes have been squashed.
However, many prominent analysts do believe that this crash is more of a “buy the news, sell the rumor”, and the market has already bottomed out. They anticipate a relief rally for Bitcoin is very much due.
Few are also of the notion that, it was normal for markets to behave the way they did and that they would return to normalcy soon.
Read More: Jerome Powell Says Uncertain How Economy Will Be Placed Next Year
According to data from CoinGlass, the crypto market action has contributed to $44 million in liquidations within the past 24 hours, most of which came from Bitcoin trades.
Read More: Crypto Market Crashes After Fed Slows Down Rate Hike To 50 BPS
The Fed’s continuous rate hikes are part of a larger effort to curb inflation and calm the economy, which has been pushing prices to their highest levels in decades.
As investors react to an uncertain economic climate, the effects of every fresh Fed rate increase are still being felt in the stock and cryptocurrency markets. For now, the price direction of Bitcoin remains in an unknown territory at least for the coming few days.
Also Read: Crypto Expert Predicts Ethereum (ETH) Price; Time To Buy?
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