Though the investors had been relieved after a fine inflation report in the United States, the price of Bitcoin (BTC) dropped again on Wednesday. The primary crypto asset is trading at around $17,670. The traders, while keeping in view the indications shown by the Fed, anticipate that the stringent monetary could keep on moving consistently in during the next year even if it is slow-paced. The overall crypto market is going through a severe decline as more than $44.80B value, equal to 16.23%, has been lost during the previous twenty-four hours.
Crypto Market Confronts Fed’s Interest-Rate Hikes amid Bearish Momentum
The stablecoins are also presenting a grim picture with a loss of $42.25 billion (counting to a huge 94.31% of the cumulative volume of the crypto market during the recent twenty-four hours. In the current pessimistic scenario, which has been triggered by the crash of Sam Bankman-Fried’s FTX, investors can remotely see any bullish movement shortly. The report brought to the front a mounting US inflation of 7.1% in comparison with the 7.3% that was estimated by the economists.
Main inflation, excluding the additionally volatile fuel and food costs, heightened by six percent as opposed to the expected 6.2%. in the case of the seasonal basis in the history of the market, it is moving into a time when the performance is not very resilient. Bitcoin’s level of $17,750 is considered a low volume mark, signifying the potential for swift price moves.
Inflation Still Hinders the Market Progress
Since Monday, the Bitcoin momentum has spiked by 23% while utilizing the measurement proxy called the Relative Strength Index (RSI). As the Federal Reserve mounted the interest rates by 0.5 percent, following the hikes of sequential 75 bps, inflation is playing the role of a significant concern. Powell’s remarks on this pointed out that the central bank of the United States is determined to fight inflation without giving up too shortly.
His tone was hawkish, with a subsequent reaction witnessed in the market. The yields of the bond market reacted to the remarks of the Fed with elevated gains for 2-year US Treasury. This sustains an overturned yield curve while juxtaposed to its counterpart of ten years. The spike in the temporary interest rates raises questions regarding the short-range economic scenarios, as well as prospects for additional forceful interest-rate hikes by the Fed.