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Bitcoin touches lowest level since December 2020 after Fed's 75 bps hike

As of 12 PM (IST), Bitcoin was trading at $18,735, and Ethereum was at $1,272. The total crypto market cap is now nearing $900 billion

BS Web Reports | Bitcoin | crytocurrencies

Raghav Aggarwal  |  New Delhi 

An advertisement for Bitcoin cryptocurrency is displayed on a street in Hong Kong on Feb. 17, 2022. Cryptocurrencies have experienced their worst plunge since 2018. (AP Photo/Kin Cheung, File)
AP Photo/Kin Cheung

After the Federal Reserve's (Fed) 75 basis points interest rate hike, touched its lowest level since December 2020. In the last 24 hours, the price of has fallen nearly 2 per cent, and the total crypto market cap is now nearing $900 billion. It was over $1 trillion on September 15.

As of 12 PM (IST), was trading at $18,735, and Ethereum was at $1,272, according to coinmarketcap.

"Bitcoin reacted with a 6.5 per cent swing to the downside that bottomed at $18,600 while Ethereum fell from about $1,393 to $1,316 directly after the announcement," according to the CoinDCX research team.

Ethereum, in the last seven days, has fallen 22 per cent. The fall has been sharp since the company announced the completion of its upgrade "Merge" on September 15.

"The price of ETH has been dipping since the Merge took place as miners continue to dump their ETH in the market coupled with macroeconomic factors," Edul Patel, CEO and co-founder of crypto trading platform Mudrex, said.

Fed chair Jerome Powell's statement also signalled that the US might continue to see sharp rate hikes in upcoming meetings.

"The pressure is still on for another significant hike in the next few months as the FED targets a funds rate above 4 per cent by the end of the year, especially on the backdrop of brimming payroll data and increased service inflation in an overheated labour market," CoinDCX said.

With the latest 75 bps hike, US reached 3.25 per cent, the highest since 2008.

"Post the Fed's announcement, it may take some time for investors and traders to digest and get back to the market, so we might see volatile sessions in the coming few days," Patel added.

On what can be expected in the coming days, he said, "If BTC can hold above the $19,000 level, we may see an upward growth. On the other hand, Ethereum was seen changing hands above the $1,200 level. If the selling pressure from miners increases, ETH is likely to fall below the $1,000 level."

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First Published: Thu, September 22 2022. 13:28 IST