This Wednesday, the US Federal Reserve announced that it was planning to initiate moves to clean up its balance sheet. What this meant was that the Fed intended to raise interest rates.
Although the Fed did not immediately raise the interest rates, the rate hike does seem imminent. The Fed said that an interest rate hike was inevitable to check rising inflation. Crypto analysts and traders believe that the rate hikes may happen as early as May or June.
Till the announcement, cryptocurrencies were witnessing a rally, with BTC valued at about $39,000. However, this rally did not last long. BTC’s value soon after fell to $37,000. This trend seemed to mirror the movements in the equities market. The price of BTC also fell after the investors and traders seemed to have analyzed the implications of the announcement by the Fed.
Over the past day, BTC’s intra-day price fell during trading to $36,800. Meantime, ETH, which is the second-largest cryptocurrency measured by market cap, was priced at $2450. This represented a slight intra-day high.
According to available data, in all crypto exchanges, the spot trading volume of BTC showed an upward trend.
Crypto analysts also believe that the large-scale selling of cryptocurrencies will soon end. They believe that there will be a rise in alternative cryptocurrencies. But this can happen only if BTC will rise and finally settle at a price between $40,000 to $50,000.
BTC has, of late, shown a revival. It is facing resistance at the $40,000 – $43,000 level, and this is slowing down the price rise. However, the momentum of the buying activity remains low. It is likely to pick up only after the price moves above $40,000.