The price of Bitcoin (BTC) fell to a level not seen in more than 7 days as investor anxiety grew in anticipation of the Federal Reserve raising interest rates (Fed).
According to data from CoinMarketCap, the leading cryptocurrency is currently trading around $21,000, down 4.26 percent today and an additional 7.17 percent over the past week. As a result, the total market value of the digital asset is currently $400.13 billion. More than a week ago, on July 18, BTC had a market cap of this amount.
Expectations for a long-lasting Bitcoin recovery have been dashed by the dip, which has brought the coin’s trading range back to $19,000 to $22,000. As a result of the tightening cycle that is reducing liquidity and the anticipated 75 basis point Fed rate increase on July 27, investors’ appetite for risk appears to be waning.
“We’ve had some stabilization over the past few weeks and that gave some folks confidence that perhaps a bottom was being put in place. We’re not so convinced,” Katie Stockton, co-founder of Fairlead Strategies, said on Bloomberg Television.
Thread Tuesday ? #FOMC – Federal Open Market Committee
— Eight (@eight_global) July 26, 2022
The FOMC meeting tomorrow will be decisive for the market direction. Let’s have a look at the reason it is relevant for #crypto and the possible outcomes.
1/n pic.twitter.com/2dQ9Svj2kq
It’s worth noting that cryptocurrency consulting platform Eight Global has a more upbeat outlook for the Federal Open Market Committee (FOMC) gathering on July 27. The website stated that the federal funds rate is significant for cryptocurrency because:
“Crypto is correlated to the stock market, and the stock market is impacted by the federal funds rate. Rising rates hurt the performance of stocks while lowering rates make stocks more interesting as investment.”
The majority and most likely outcome, according to Eight Global, is a hike of 75 basis points, although the market has already factored this in.
“A 75 bps hike will either have a neutral or bullish outcome for stocks and crypto, as this has been priced in during the past weeks.”
With the markets correcting, cryptocurrency trading analyst Michal van de Poppe stated that he is “looking at a $20.5K-20.7K level to hold for Bitcoin going into FOMC tomorrow.”
The regulatory oversight of the industry is tightening as a result of unpredictability. The question of whether Coinbase improperly permitted Americans to trade digital assets that ought to have been registered as securities are being investigated in the US.
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