Bitcoin had nearly touched the crucial $18,000 mark but it slipped 0.76% and is now trading at $17,642. Investors had been awaiting the decision by the US Federal Reserve on interest rates and they got the nod with Jerome Powell’s explanation of why the central bank would stay the course and the 50 basis point hike.
Data suggests that the leading cryptocurrency’s price remains closely correlated to equities. And investors expressed concerns about the impact of further rate increases in the future. Powell said there may be higher rates for a longer period to achieve the 2% inflation goal. This means that interest rates will continue to rise for the foreseeable future.
Following the retrace in cryptocurrency prices, analysts recommended the dip as a metric to buy more Bitcoin. The topmost crypto’s open interest, as per its derivatives data, shows 60.16% of traders are long. Moreover, the market is comprehending the views of the FOMC and Powell.
Edward Moya, the senior market analyst at Oanda, believes cryptos are getting dragged down as the dollar rallies with the return of risk aversion. Overall, the crypto market is significantly down from its all-time highs. But it should be noted that BTC’s price reacted positively. It rallied to one month high at $18,147 on December 14. Many traders, despite the gains, are warning of a final capitulation in Bitcoin’s price. Volatility is likely and the bottom is not in for the crypto market; Bitcoin on-chain losses saw record highs in 2022. Furthermore, experts see the current market valuation as a buy signal.