Bitcoin and Ethereum have resurged in price following a rough week caused by speculation over an important Federal Reserve meeting and its outcome as regards interest rates in the United States.
According to Decrypt, Bitcoin price at the time of writing this report was around $57,700 after having made a 0.5% recovery in the past 24 hours. And the Ethereum price, after climbing 2.3% in the past day, is now trading for just below $3,000,
Notwithstanding, the damage to the crypto market has already been done as the past 24 hours witnessed another $193 million worth of crypto futures contracts liquidated, adding to the $300 million worth of liquidations seen earlier this week.
Economist, Trader, and Crypto Analyst Alex Kruger explained the complexities of this current cycle and how it feels different for traders because it’s largely been driven by interest in spot Bitcoin ETFs, which only just started trading in January this year.
- “There has been barely any new retail coming into crypto,” he wrote on Twitter. “It’s been mostly ETF buyers and previous cycle participants redeploying and going out the risk curve.”
Analysts explained the crash in crypto prices to be caused by fear in the market by investors over certainty among investors that the Federal Open Markets Committee would not lower interest rates. Then the Feds proved them right by leaving interest rates unchanged affecting crypto prices.
During a press conference yesterday, Federal Reserve Chair Jerome Powell told reporters that the fight to get inflation to 2% has been difficult, and he seriously doubts the next decision on the policy rate will hike it.
President Joe Biden reassured the American populace in a press conference in Japan that he is confident that there would be a rate cut before the year is out.
What To Know
- Bitcoin hit its highest price of $65,000 last month on the significant halving weekend and has steadily declined ever since.
- Bitcoin has fallen below its $60,000 and one of the major reasons is a recent disinterest in the crypto asset by investors due to its inability to profit from the tension in the Middle East.
