On June 15, the value of Bitcoin plummeted by 4% from $25,867 to $24,819 within a half-hour timeframe, as per TradingView’s data. However, as of now, Bitcoin has managed to recover and is currently hovering slightly above $25,000.
During the previous week, Bitcoin’s value had stabilized in the $26,000 range while the market was adjusting to the Securities and Exchange Commission’s legal proceedings against major cryptocurrency exchanges oinbase">Coinbase and Binance, alongside increasing macroeconomic uncertainty caused by signals of interest rates from the United States Federal Reserve.
Approximately three hours after the Federal Reserve declared a halt on interest rate hikes, which was implemented after a 15-month-long campaign of rate increases aimed at curbing escalating inflation, the value of Bitcoin experienced a significant decline.
Although the market was anticipating a rate pause, the Federal Open Markets Committee’s announcement alluded to the possibility of future rate hikes, which usually dampens investor enthusiasm for high-risk assets such as cryptocurrencies.
As per eToro’s market analyst Josh Gilbert, Federal Reserve Chair Jerome Powell has explicitly stated that this pause is merely temporary, which may result in additional long-term complications for Bitcoin. Gilbert stated that “A significant portion of the optimism that has been observed in risk assets, such as Bitcoin, this year is founded on the assumption that inflation will decrease, and interest rates will reach their zenith, following which they will commence to decline.”
The remarks made by Jerome Powell indicated that interest rates may remain elevated for an extended period, which could adversely affect Bitcoin’s position, despite inflation moving in the right direction, as stated by a market analyst from eToro. Ether, the second-largest cryptocurrency by market capitalization, also experienced a decline of over 5%, dropping from $1,727 to $1,631 during the same period. Additionally, altcoins, including several tokens categorized as securities in the SEC’s legal actions, were not immune to the bearish sentiment, with many of them experiencing a decline of more than 3%.
Over the last 24 hours, Cardano’s value has declined by 3.4%, currently standing at $0.256, whereas Polygon and Solana have experienced a decline of 3.3% and 2.8%, respectively, with each trading at $0.6145 and $15. As per Cointelegraph analyst Marcel Pechman, the present options data for Bitcoin indicates a potential further decline, particularly when factoring in the regulatory animosity towards the cryptocurrency industry in the United States, coupled with the probability of additional rate hikes from the Federal Reserve in the upcoming months.
