- The US Federal Reserve hiked the interest on monetary policy by another hefty 75 basis points.
- The crypto market capsized and almost completely registered reds reacting to this news.
- However, while Bitcoin shrugged things off and only fell by a little bit, Ethereum took a relatively larger hit.
Is crypto in trouble? As expected, the US Federal Reserve hiked the interest on monetary policy by another hefty 75 basis points for the fourth consecutive time this year to combat inflation.
Sequel to last week, when Ethereum outperformed Bitcoin in bullishness, quite the opposite happened this week.
Reacting to this news of another rate hike, the crypto market capsized and almost completely registered reds. However, while Bitcoin shrugged things off and only fell by a little bit, Ethereum took a relatively larger hit.
As illustrated above, the flagship cryptocurrency, Bitcoin, is only down by 0.75% over the last 24 hours, while Ethereum took a 2.43% hit.
The global crypto market cap has remained above the $1 trillion mark but is only hanging by a thread at $1,009,877,136,797. Even Dogecoin, last week’s star cryptocurrency, took a beating and is down by 4.58% over the last day.
Huge Swings in either Direction
According to the on-chain data collection and market intelligence platform, Santiment, equities were also dumped alongside the crypto market after the Federal Open Market Committee (FOMC) meeting, where the interest rates were further hiked.
Santiment also notes that heavy swings in either direction are probable throughout the week and that emotionally charged long or short trades may not be advisable.
Stocks and Crypto Market Collapse Following Rate Hike
Following the Fed’s decision to further hike the interest rates, the main equity markets fell sharply, with Nasdaq losing 3.3%, the Standard and Poor’s Index (S&P 500) losing 2.5%, and the Dow Jones Industrial Average (DJIA) losing 1.5%.
So far, investors and stakeholders are worried about the central bank’s approach to containing price growth and the possibility of a severe recession. These concerns are relatively valid, considering how even Gold fell by 0.7%.
For over five months, the flagship cryptocurrency has been in a range slightly above or below the significantly strong $19,000 support. After falling as low as $1,000 in previous weeks, Ethereum has spent most of that time trading around $1,300. And now that Bitcoin and Ethereum both have support levels over $20,000 and $1,500, the bulls appear to be in control of their respective markets.
The crypto market’s downturn is expected because, over the months following the FED rate hikes, the crypto market has always negatively responded to these monetary policies and other macroeconomic events.
During these times, the crypto market usually rises with encouraging news and dips when investors are more pessimistic. Such price behavior is common in crypto and stocks and across several market spheres.
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