Bitcoin (BTC) and the broader crypto market failed to recover and returned to sell-off on Thursday, after a brief rally following the US Federal Reserve’s (Fed) announcement on Wednesday that it had raised rates in 75 basis points, its largest rate increase. since 1994.
At 14:48 UTC, bitcoin stood at $21,000, down more than 1% in the last 24 hours and 31% in the last 7 days. At the same time, ethereum (ETH) was almost unchanged in a day and is down 39% for the week at $1,105.
Thursday’s losses came after a brief relief rally in both BTC and ETH on Wednesday, as market participants digested a largely expected 75-point rate hike from the Federal Reserve.
From a low of $20,111 on Wednesday morning UTC, BTC surged more than 12% to hit close to $23,000 before once again giving back most of the gains. A similar story unfolded in the ETH market as well, with the token rising from a low of $1,014 in the morning to over $1,250 shortly after Fed Chairman Jerome Powell finished his press conference, a rally of more than 20%.
Will USD 20,000 be kept According to Mikkel Morch, CEO of cryptocurrency hedge fund ARK36, the old mantra of don’t fight the Federal Reserve” has never been more relevant than in recent days, and fears about rate hikes are largely to blame. of the reduction in the prices of cryptocurrencies.
Still Morch noted that it appears that last week’s high inflation reading for May in the US, combined with recent comments from the Fed, had already spooked investors so much that the 75 basis point increase was already in place. heavily discounted when advertised. .
“Now it looks like we can expect bitcoin price to hold the $20K level,” he said in an emailed comment, adding that it will likely “consolidate there for the foreseeable future and maybe even check the 24K resistance.