Bitcoin drops below $19,000, Ethereum tests $1,300 as Fed raises interest rates to 15-year high | Cryptocurrency

  • The Federal Reserve announced it was raising key interest rates by 75 basis points for the third time this year, bringing the federal funds rate to 3-3.25%.
  • Following the announcement, US stock markets wiped out gains seen from the first call.
  • The biggest impact is yet to be seen in the crypto market as, following historical examples, companies like Bitcoin and Ethereum are set to test lower lows.

After several weeks of waiting, the Federal Reserve again raised its key rate on Wednesday by 75 basis points. The impact of this rise was no different from what the markets expected: US stock markets fell into the red after this decision. The cryptocurrency market, however, has not reacted so badly.

The Fed is repeating history again

For the third time this year, the Federal Reserve decided to raise interest rates by that amount. The Federal Open Market Committee (FOMC) has set itself the goal of reaching an inflation rate of 2% in the long term. For the same reason, the fund rate range has increased from 3% to 3.25%, making it the highest in almost 15 years.

However, this will not be the end as the Fed’s economic forecasts show that central banks expect the key rate to reach 4.4% by the end of this year and 4.6% by the end of this year here at the end of next year.

A statement released after the interest rate hike reads:

“The Committee would be ready, if necessary, to adjust the position of monetary policy if risks arise that may interfere with the achievement of the goals of the Committee. »

After the growth, the US stock markets reversed their previously reached positions and turned negative. The Dow Jones, NASDAQ and S&P500 indexes lost 1.73%, 1.45% and 1.75% respectively during the day.

Will the Cryptocurrency Market Survive the Heat?

Given the growing correlation of bitcoin with stock markets, BTC prices and the cryptocurrency market were expected to fall after the Fed’s rise. However, although BTC hit an intraday low of $18,700, the candles remain green. Although BTC is trading at $18,967, it is perilously close to the critical 3-month support level of $18,600.

24 hour bitcoin price chart

Ethereum remained virtually indifferent, trading at $1,322. If there is a Fed announcement by the end of the day, BTC and ETH could trigger price drops.

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