Bitcoin (BTC) is presently trading at $35,686.47, down 5.09 percent from its recent high of $40,000. The slump has an impact on more than just Bitcoin and the cryptocurrency market. The stock market and commodities were not spared from the selloff triggered by Federal Reserve Chair Jerome Powell’s statements on future interest rate hikes and inflation fears.
Factors for Bitcoin’s Decline
The FOMC report is the first. When the Fed announced its decision yesterday, it used an unusually forceful tone. Eleven of the Fed’s 18 officials expect at least two quarter-point interest rate rises in 2023, indicating that asset tapering discussions have begun. This lifted the dollar index, causing the dollar to strengthen and, as a result, the value of Bitcoin to fall. Investors lost trust in the market as a result of the FOMC report, which increased the momentum of exchange inflows.
Given Bitcoin’s failure to reclaim the $40,000 trading zone, investors should keep an eye on on-chain analytics to see where investor sentiment is headed. So far, some data suggests that whale wallets holding between 100 and 10,000 bitcoins have boosted their holdings by 90,000 bitcoins in the last 25 days, implying a more positive long-term outlook.
