Bitcoin (BTC), the world's largest cryptocurrency, experienced a dip on Friday as it failed to maintain its upward momentum and dropped below $27,000.
Jerome Powell's statement about possible interest rate hikes caused a 1.5% decrease in the global crypto market to $1.06 trillion.
Bitcoin has been trading sideways due to Powell's statements and the increase in 10-year note yields.
The Federal Reserve's comments triggered a sell-off in various markets, including the crypto market.
The crypto fear and greed index has dropped by 4 points to 43/100, indicating fear among investors.
On the other hand, the optimistic outlook for the US Dollar, attributed to the Federal Reserve's hawkish stance, is exerting additional pressure on Bitcoin's price.
It's widely recognized that the Fed recently opted to maintain interest rates at a 22-year peak, set within the 5.25% to 5.50% range, a move that aligned with expectations.
In their official release, the Fed alluded to the potential of one more rate hike by year's end, driven by ongoing inflation concerns.
Moreover, policymakers forecast the benchmark rate to hover around 5.1% next year, implying only two rate cuts in 2024—down from the four initially projected.
Consequently, the Federal Reserve's hawkish position, combined with potential interest rate increases and a bolstered US Dollar, has influenced Bitcoin's price negatively.
Given this context, investors might perceive the Dollar as a more appealing asset relative to Bitcoin, potentially leading to decreased demand for cryptocurrencies and a corresponding dip in Bitcoin's value.
Despite the challenges in the broader economic landscape, Bitcoin has the potential to gain solid ground through the continuous pursuit of spot BitcoinRead more on cryptonews.com