Failing to breach the resistance at $24,000, Bitcoin slipped to the $23,000 mark but is ending a second consecutive week with gains. The crypto market pushed higher after the US Federal Reserve raised the interest rates to 75 basis points on Wednesday.
At the time of writing this article, Bitcoin was changing hands at $23,822, bouncing between positive and negative territory. However, the popular cryptocurrency’s price is down 50% year to date. Bitcoin prices and equity indexes tightened over the past week, in terms of 30-day correlations, as crypto assets and stocks rose in the week. Moreover, it’s reacting well to the US GDP data. The second most popular cryptocurrency Ethereum was trading at $1,707.
Arthur Hayes,ex-CEO of BitMEX, says the Fed will not increase rates further and it may return to an accommodative monetary policy and more neutral rates. With Bitcoin now easily passing the $23,000 – $24,000 level, investors are gaining confidence in the risk asset. Bitcoin is doing better than expected but is still very much aligned to the US stock market, a pattern that has been observed for most of 2022.
Guggenheim Partners says the crypto industry has not yet been cleared of distressed partners. It will be in trouble long-term due to regulatory pressure and a lack of strong institutional support. The cryptocurrency market, as per the International Monetary Fund, will see a significant fall if the economy goes into recession.
So far Bitcoin has lost 48% in 2022 – its current price is nearly 60% off from its all-time high of nearly $68,000 in November 2021.