Bitcoin dropped to the $21,000 mark as the crypto market felts the jitters ahead of the Federal Reserve’s interest rate call. It took the total market value of the digital asset to $403.13 billion. The downturn has dashed hopes of a swift recovery after months of lows.
Bitcoin is trading at $21,194, while Ethereum is at $1,444. The broader crypto market gave a mixed reaction of slight gains in the last 24 hours. Consulting firm Eight Global believes the crypto market has an upbeat outlook. It highlighted that crypto is correlated to the stock market – and the stock market is impacted by the federal funds rate. The firm stated that stocks are affected by rising rates, and lowering rates makes it more interesting as an investment. Eight Global says a 75 basis points hike is likely. It will either have a neutral or bullish outcome for stocks and crypto.
With the impending rate hike, Bitcoin is once again trading in the range of $19,000 – $22,000. The rate hike is part of the tightening cycle squeezing liquidity, and as a result, the investors’ appetite for risk is waning. Katie Stockton, the co-founder of Fairlead Strategies, said there has been some stabilization over the past few weeks, which gave some investors confidence that a bottom was being put in place. But she is not so convinced. Michael van de Poppe, the crypto trading expert, sees a $20,500 – $20,700 area to hold for Bitcoin going into FOMC.