Major coins traded in the red on Wednesday evening as the Federal Open Market Committee (FOMC) delivered on its widely expected announcement to raise interest rates by a quarter point. Cryptocurrency Gains (+/-) Price (Recorded 9:30 p.m. EST) Bitcoin -2.91% $27,299 Ethereum -3.31% $1,736 Dogecoin -2.63% $0.073
What Happened: Apex cryptocurrency Bitcoin BTC/USD is currently trading below $28,000.
Ethereum ETH/USD was down3.31% to change hands below $1,800. Dogecoin DOGE/USD was trading at $0.073, down 2.63% in the last 24 hours.
At the time of writing, the global crypto market capitalization stood at $1.14 trillion, a decrease of 2.69% over the last day.
U.S. stocks tumbled on Wednesday as the Federal Reserve continued hiking rates. The S&P 500 and tech-heavy Nasdaq all closed down 1.6%.
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News Highlights: The Federal Reserve's decision to increase its key interest rate highlights their concern that inflation remains problematic. According to Fed Chair Jerome Powell, the FOMC is "strongly committed to returning inflation to our 2% objective".
However, the FOMC also acknowledged this month's banking near-meltdown, noting that "recent developments are likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring and inflation."
Twitter chief Elon Musk criticized the rate hike by the Federal Reserve, warning that it could cause a major influx of depositors to leave their banks – creating a headache for both policymakers and the banking industry in the midst of the ongoing economic crisis.
"A major driver of depositor flight is people moving money from low-interest savings accounts to high-interest money market (Treasury Bill) accounts. This foolish rate hike will worsen depositor flight," Musk tweeted.
Analyst Notes: Risk aversion was able to drag down Bitcoin as market jitters returned on banking worries and over a quickly weakening economy. The Fed might be done tightening, but the risk of something else breaking in the financial sector remains elevated,said Edward Moya, a senior market analyst at OANDA.
"A crackdown on Crypto influencers was widely expected and appears to finally be here. While the violations against Lindsay Lohan, Soulja Boy and Jake Paul wont draw serious attention, the alleged fraud and unregistered securities by Tron found Justin Sun is newsworthy. Market manipulation is one part of the crypto world that still has yet to be cleaned up or even close to fully being addressed, Moya added.
Crypto analyst Michal van de Poppe saidPowell will likely remain on the hawkish side which suggests that Bitcoin is likely to top out and enter a period of consolidation before any further continuation. The analyst said he is interested in the $25,000 levels.
#Bitcoin hit $28,700 and follows scenario 1, still.
Powell will probably remain hawkish and do his standard thing, as he continued to hike with 25bps as well.
I think we’ll be topping out for now and have some consolidation before continuation.
Interested at $25k. pic.twitter.com/ckWYqu5jkL Michal van de Poppe (@CryptoMichNL) March 22, 2023
According to pseudonymous analyst Kaleo, the move from $30,000 to $40,000 in Bitcoin could happen much faster than most people expect. Plenty of people who *want* to be bulls, but are waiting for a dip will be left watching from the sidelines.
The move from $30K to $40K $BTC is going to happen a lot quicker than most people think.
Plenty of people who *want* to be bulls, but are waiting for a dip will be left watching from the sidelines. K A L E O (@CryptoKaleo) March 22, 2023
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