Bitcoin, the largest cryptocurrency in the world, along with Ethereum, lost some of their value and fell below the $28,000 and $1,800 levels respectively. However, the reason could be related to the release of a dovish statement from the US Federal Reserve regarding interest rates.
In effect, the Fed raised rates as expected, but suggested a possible halt to its rate hike cycle following the financial crisis. But, at the same time, the central bank reaffirmed its commitment to lower inflationexpecting at least one more hike this year and saying it has no plans to cut interest rates this year.
This has generated some uncertainty and greater volatility in the marketleading to a momentary drop in the price of Bitcoin.
It should be noted that Bitcoin is used as a way to protect wealth against inflationso when interest rates rise, people may not want to invest too much in bitcoin, because rising rates reduce bitcoin’s appeal as an inflation hedge.
Moreover, higher interest rates can make investing in US dollars more attractive, tricking people into selling their Bitcoin and other cryptocurrencies. Thus, this decision by the Federal Reserve was seen as a negative sign for Bitcoin and other cryptocurrencies.
Bitcoin’s Safe Haven Status Boosts Crypto Market, But Fed Decision Affects Its Appeal
The global cryptocurrency market has recorded impressive performance in recent weeks. This is due to positive opinions of people about bitcoinbecause they think it is a safe alternative to keep their money after the collapse of Silicon Valley Bank, along with two other banks, Silvergate Capital and Signature Bank.
Despite this, Bitcoin’s value has not fallen, but has grown in popularity, as it has prompted some Bitcoin proponents to assume that Bitcoin is a viable alternative to established financial institutions to safeguard your money.
This is called a ” safe investment “. This is one of the main reasons for the rise of the bitcoin market.
However, BTC declines appear to be fading right after the US Federal Reserve announced a 25 basis point interest rate hike. The Federal Reserve has stressed that it is prioritizing inflation despite the recent banking crisis.
Bitcoin is considered a safe place to put your money and a way to protect against rising prices. However, when the US Federal Reserve raises interest rates, this can make it less attractive to invest in Bitcoin.
Indeed, higher interest rates can make the US dollar more attractivetricking people into selling their Bitcoin and other cryptocurrencies in favor of the dollar.
Increase in activity of large investors who trust Bitcoin
On the positive side of things, sources say more big investors are buying bitcoin, as well as Bitcoin Wrapping on other networks. It’s been going on for a while.
To date, more than 13,000 large transactions were made by the big bitcoin investors known as “whales” and over 100 transactions made by whales on Wrapped Bitcoin. This indicates that the whales are more active than normal.
Consequently, Bitcoin and Wrapped Bitcoin are experiencing their highest levels of whale activity in several weeks. This revelation will probably a positive impact on the price of Bitcoin since it indicates that major investors believe in the future of Bitcoin.
Bitcoin price
The current value of Bitcoin is $27,760 with a trading volume of $32.3 billion in the last 24 hours. The price of Bitcoin has fallen by almost 1.5% in the past 24 hours. It is, however, still ranked #1 on CoinMarketCap, with a market capitalization of $535 billion.
The BTC/USD pair is currently consolidating near the $26,600 support level, after breaking through the $26,250 resistance level. Due to continuous uptrendthere is a probability of further increase in value of Bitcoin to reach $28,900 or even $30,040.
Meanwhile, Bitcoin’s support levels continue to hold at around $26,600 and $25,200 and they are unlikely to be reached on the downside.
The price of Ethereum
The current price of Ethereum is $1,760 and the 24-hour trading volume is $12.6 billion. Ethereum is down nearly 1.70% in the past 24 hours. At present, Ethereum has a live market capitalization of $214 billion.
The ETH/USD pair is currently experiencing a minor correction, but with less intensity than Bitcoin. Ethereum struggles to clear resistance at $1,800 and hovers around the $1,700 support zone.
If the pair manages to break above the $1,800 levelshe should face significant resistance at $1,900.
ETH/USD is likely to find immediate support at the $1700 level or $1620 on the downside.
Top 10 Alternatives to Bitcoin and Ethereum to Watch
Cryptonews Reviewed top 10 cryptocurrencies for 2023. If you are looking for a higher potential investment opportunity, there are many other projects worth considering.
Disclaimer: This linked article presents the views of crypto industry players and is not part of the editorial content of Cryptonews.com.
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