How the Federal Reserve Tapering Drastically Affects The Cryptocurrency Market's Price Movement &n" />

How the Federal Reserve Tapering Drastically Affects The Cryptocurrency Market’s Price Movement

How the Federal Reserve Tapering Drastically Affects The Cryptocurrency Market’s Price Movement

 

Market moves

On Wednesday, minutes from the December meeting of the Federal Reserve were released, and one of the Fed’s officials said that they were apprehensive about high inflation. Bitcoin fell below $44,000 after this.

A CoinDesk Data report says that bitcoin was trading at a value of $40,000 as of this writing. That’s down 5.87 percent from the last 24 hours.

After the minutes were released at 19:00 UTC on Wednesday, bitcoin dropped 2.73 percent to $44,500 on the hourly chart.

“Participants said that, based on their views about the economy, the labor market, and inflation, it may be appropriate to raise the federal funds rate sooner or at a faster pace than participants had thought.” After raising the federal funds rate, some people also said that it might be good to start cutting back on the Federal Reserve’s balance sheet size as soon as possible.

CoinDesk has said that bitcoin and other traditional risk assets could be under pressure if the minutes show that the Federal Reserve is debating raising interest rates and cutting back on its balance sheet in March.

Many people think of bitcoin as a way to protect against inflation. It is also a new technology, so it reacts to changes in monetary policy just like the tech-heavy Nasdaq index, which is also affected by changes in monetary policy,

After the Fed released its minutes, the S&P 500 and the Nasdaq fell. At the same time, the yield on 10-year Treasurys rose, which caused U.S. Treasurys to fall as well.

The sell-off spread to other currencies. The hourly chart on TradingView shows that Ether was down 2.51 percent to $3,644.44 in the hour after the minutes came out. After the second-largest cryptocurrency by market value rose to almost $3,900 in early U.S. trading hours on Wednesday, the coin price fell.

Some technicians take the price of Bitcoin down below $45,000. A month’s worth of support for BTC has broken below $45,000, which was the bottom of that price range. On the daily chart, it’s not clear if buyers will come in on the dip because there have been a lot of oversold signals there. It looks like short-term buying could be limited below $50,000 right now because the upward momentum isn’t as strong as it was before. In November, when the stock market hit a record high of around $69,000, there was a downtrend. There is a lot of solid resistance ahead. Sellers stay in charge. At approximately $40,000-$42,000, bitcoin hit a low point during its early December crash. This is a range it hit at that time.

 

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