Bitcoin suffers after the Fed's latest decision: "It could fall even further"
The cryptocurrency market faces notable declines. Bitcoin (BTC) falls sharply in the last 24 hours and stands at $26,600, while Ethereum (ETH), which followed in its wake, is just below $1,600.
Digital assets continue to suffer in the wake of the Federal Reserve's (Fed) latest monetary policy decision. The U.S. central bank did not raise interest rates, but announced that they would remain higher for longer and took a tougher stance than the market would have liked. Decisions by other central banks, which have largely toed the Fed's line, have not helped either.
"U.S. equity and rates markets have broken some very key levels on the back of this, and reflexivity can take over with the bearish thesis from here.This macro move could seep into crypto markets and take BTC lower with it, albeit with a lower beta as compared to other very stretched macro markets like the Nasdaq," the experts at QCP Capitale explained.
In recent sessions, equities have fallen sharply, with the Nasdaq and S&P 500 dropping over 1.5% in recent sessions, while the US bond has reached levels not seen in almost two decades and the dollar index (DXY), which measures the strength of the US dollar against a series of major currencies, reached its highest level since the banking crisis in March.
Edward Moya, senior market analyst at OANDA, stressed that these latest developments paint a very challenging picture for crypto companies, as "borrowing costs will remain elevated and refinancing will be a nightmare for crypto firms."
Craig Erlam, also a senior market analyst at OANDA, commented that the cryptocurrency queen´s trend is markedly bearish, "but there are bigger things to focus on." "Bitcoin is trending a little lower, roughly aligned with how other risk assets have performed in the aftermath of the Fed decision. Broadly speaking though not a lot has changed for Bitcoin recently. There's been some bursts of volatility but price-wise, it's just fluctuating primarily between $25,000 and $27,500. Perhaps it's simply a case of traders awaiting more ETF news, or other catalysts within the space, as the post-Fed move wasn't particularly significant," the expert added.
However, other experts pointed out that the lack of positive reaction following the delay of payments related to the Mt. Gox bankruptcy is not a flattering sign for Bitcoin. The failed exchange was due to release some 850,000 BTC ($23 billion) into the market, which the market feared would exert significant selling pressure on the reigning cryptocurrency due to increased supply, but yesterday, on Thursday, the person in charge of overseeing the liquidation process delayed the execution of the payments by a year. Despite this, the cryptocurrency queen´s price has shown no signs of rebounding.
In the rest of the market, altcoins have also suffered badly. XRP is the best performer, while Dogecoin (DOGE), Cardano (ADA), Solana (SOL) and Polkadot (DOT) fall by more than 1% and 2% in some cases in the last day.