According to recent market data, the value of Bitcoin (BTC) has experienced a decline below the $25,000 mark, a threshold which it has not fallen below in the past three months. This decrease in value is reportedly due to indications from the Federal Reserve that they may be considering the implementation of additional interest rate hikes.
In the digital asset market, a significant number of coins experienced weekly losses, resulting in a noticeable decline in their market values. Among the top 20 coins by market capitalization, Polygon (MATIC) suffered the largest losses, with a decline of 24.1% over the past week and a further 8% decrease within the past 24 hours. Additionally, Solana (SOL) saw a significant drop of 22.8% and is currently trading at $14.54.
Over the course of the previous seven days, the cryptocurrency known as Cardano (ADA) experienced a decline in value, erasing the modest gains it had achieved earlier in the month. Widely recognized as an “ETH Killer,” Cardano’s worth decreased by 22% over the course of the week and 7% in the previous 24 hours. Similarly, XRP underwent a price correction following the disclosure of the Hinman documents, which caused a stir within its community. As a result, XRP’s value dropped by 5.44% in the past week, with the cryptocurrency currently trading at $0.475.
In recent developments, various alternative cryptocurrencies have experienced significant declines, such as Polkadot (DOT), BNB, Avalanche (AVAX), and Shiba Inu (SHIB), which have recorded losses of 13.96%, 12.4%, 19.4%, and 17%, respectively. The plunge in Bitcoin’s value, which has fallen below the $25,000 threshold for the first time in three months, has left BTC investors surprised. Currently, Bitcoin is trading at $24,950, and several on-chain metrics suggest an upward trend for the asset.
Upon the unveiling of the latest Consumer Protection Index (CPI), the financial market was poised for a resurgence in asset values, with many anticipating the Federal Reserve’s decision to terminate the 14-month interest rate hike. Despite the positive inflation data, the interest rates were kept unchanged, although the Feds acknowledged the possibility of a rate hike towards the end of the year.
As per the views of Josh Gilbert, a market analyst at eToro, a hike in interest rates can have an adverse impact on the market, as it can dampen investor enthusiasm and lead to a shift away from high-risk assets.
The positive performance of high-risk assets, including Bitcoin, witnessed this year, is primarily based on the notion that inflation will decrease, and interest rates will reach their peak, followed by a reduction. While inflation appears to be moving in the right direction, the recent remarks made by Jerome Powell indicate that the interest rates might remain elevated for an extended period, thereby posing a challenge to Bitcoin’s growth, as explained by Josh Gilbert, an analyst at eToro.
The stock market, much like cryptocurrencies, responded correspondingly to the Federal Reserve’s statements, as evidenced by the decline in points for both the S&P 500 and Nasdaq.
