Bitcoin plunges as the Fed confirms plans to hike interest rates

  • The Federal Reserve chair has confirmed that plans to raise interest rates will begin in March this year.
  • The crypto market and stocks have reacted, and token prices have plummeted.
  • At the time of writing, Bitcoin is down 3.15% and Ethereum is down 5.25%.

Following a two-day Federal Open Market Committee (FOMC) meeting that ended Wednesday, Federal Reserve Bank Chair Jerome Powell held a press conference to discuss the country’s plans for monetary policy. Powell said the Fed will stop buying assets by March and postpone plans to raise interest rates until then.

Prior to yesterday’s press conference, the market looked bullish and optimism. In fact, minutes after the press conference, Bitcoin’s price rose to a peak of $38,740.

However, 30 minutes after the briefing, the market began to turn into the red and has remained almost that way ever since.

At the time of writing, the aggregator platform CoinMarketCap Shows that BTC has wiped out more than 3% profit in the last 24 hours and is trading at $36,820. Ethereum is also on a downtrend, keeping the price down 5.5% to $2,480 that day, so the song is no different for Ethereum.

Even stocks with a relatively high correlation coefficient with Bitcoin rose and fell before and during the meeting.

Plans to raise rates caused a slump

The market downturn was triggered by the Fed’s exposure to withdraw near-zero interest rates from March and establish new rate hikes to combat rising inflation levels.

“”It can be said that the Commission is keeping in mind raising the federal funds rate at its March meeting, assuming the conditions are appropriate.“” Powell said.

However, the announcement was not new, as the Fed had already announced a tapering plan to end asset purchases and interest rate decisions.

Inflation is currently above the Fed’s 2% target. Therefore, central banks hope that raising benchmark rates will prevent current highs from taking root.

Altcoin market performance

Alongside the market giants of Ethereum and Bitcoin, the price of altcoin against the dollar has fallen following the announcement of the FRB.

Solana sees the worst impact of the top 10 crypto assets by market capitalization.According to the data provided by CoinMarketCap, SOL is trading for $92.6, down 8.3% in the last 24 hours.

The recent outage of the blockchain has brought no benefit to the network as it continues to swim in the bright red waters.

Terra’s LUNA is below the key level of $60 and Polygon’s MATIC is $1.6, 2.7% below the price 24 hours ago. Cardano (ADA) has little support for $1.05 and is trading at $1.07, with a drop of about 5% over the same period.

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