Bitcoin touches lowest level since December 2020 after Fed’s 75 bps hike

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After the Fed­er­al Reserve’s (Fed) 75 basis points inter­est rate hike, touched its low­est lev­el since Decem­ber 2020. In the last 24 hours, the price of has fall­en near­ly 2 per cent, and the total cryp­to mar­ket cap is now near­ing $900 bil­lion. It was over $1 tril­lion on Sep­tem­ber 15.

As of 12 PM (IST), was trad­ing at $18,735, and Ethereum was at $1,272, accord­ing to coin­mar­ket­cap.

“Bit­coin react­ed with a 6.5 per cent swing to the down­side that bot­tomed at $18,600 while Ethereum fell from about $1,393 to $1,316 direct­ly after the announce­ment,” accord­ing to the CoinD­CX research team. 

Ethereum, in the last sev­en days, has fall­en 22 per cent. The fall has been sharp since the com­pa­ny announced the com­ple­tion of its upgrade “Merge” on Sep­tem­ber 15. 

“The price of ETH has been dip­ping since the Merge took place as min­ers con­tin­ue to dump their ETH in the mar­ket cou­pled with macro­eco­nom­ic fac­tors,” Edul Patel, CEO and co-founder of cryp­to trad­ing plat­form Mudrex, said. 

Fed chair Jerome Pow­ell’s state­ment also sig­nalled that the US might con­tin­ue to see sharp rate hikes in upcom­ing meetings. 

“The pres­sure is still on for anoth­er sig­nif­i­cant hike in the next few months as the FED tar­gets a funds rate above 4 per cent by the end of the year, espe­cial­ly on the back­drop of brim­ming pay­roll data and increased ser­vice infla­tion in an over­heat­ed labour mar­ket,” CoinD­CX said. 

With the lat­est 75 bps hike, US reached 3.25 per cent, the high­est since 2008. 

“Post the Fed’s announce­ment, it may take some time for investors and traders to digest and get back to the mar­ket, so we might see volatile ses­sions in the com­ing few days,” Patel added. 

On what can be expect­ed in the com­ing days, he said, “If BTC can hold above the $19,000 lev­el, we may see an upward growth. On the oth­er hand, Ethereum was seen chang­ing hands above the $1,200 lev­el. If the sell­ing pres­sure from min­ers increas­es, ETH is like­ly to fall below the $1,000 level.”

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