Bitcoin rose slightly on Thursday and by the time this article was written, its price had reached $19,152. At the same time, in the first hours of the trading session, bitcoin updated three-month lows, falling below $18,200.
According to the tracking website CoinMarketCap, over the past 24 hours, Bitcoin reached a high of $19,674 and a low of $18,290.
Over the past 24 hours, the price of BTC has fallen by 0.3% and closed the session at about $18,900.
Yesterday, the main reason for the collapse of the first cryptocurrency was the announcement of the results of a two-day meeting of the US Fed on monetary policy in September.
On Wednesday, the regulator increased its key rate by 75 basis points to the highest level since 2008 – 3-3.25%.
In addition, US Central Bank officials said they would continue to reduce their holdings of Treasury and mortgage-backed securities, as well as agency debt.
In March 2022, the US Federal Reserve raised its key rate by 25 basis points, by 50 in May, and by 75 in June.
By the way, experts of analytical company Kaiko reported that BTC volatility was significantly dependent on the results of the Fed meetings.
According to analysts from Kaiko, Bitcoin’s high correlation with the Fed’s decisions was recorded back in the summer of 2021, indicating that the cryptocurrency market has long been influenced by key macroeconomic indicators.
When the Fed increased the rate to 0.75-1% in May 2022, the value of the first cryptocurrency dramatically surpassed the $40,000 level but collapsed below $36,000 on the same day, launching a prolonged correction.
In June 2022, when the regulator raised the key rate to 1.5-1.75%, BTC instantly reacted with a spectacular short-term rise to $22,000 and collapsed sharply to $18,000 after that.
The July rate hike to 2.25-2.5% triggered a sharp rise in major cryptocurrencies. Bitcoin exceeded $22,000 and Ethereum rose above $1,500.
At the end of the summer, the main digital asset reacted to the speech of the head of the US Central Bank Jerome Powell, and collapsed below the level of $21,000.
Market analysts believe the digital asset market will respond even more strongly in the coming months to speeches by global central banks, as interest rate increases often sharply reduce investors’ ability to invest in risky assets such as digital currencies.
On Thursday morning, BTC was under pressure from weak results of the last trading session on the US stock market. On Wednesday, the Dow Jones Industrial Average dropped by 1.7%, the S&P 500 also fell by 1.7%, and the NASDAQ Composite by 1.8%.
Since the beginning of 2022, analysts have increasingly emphasized the high level of correlation between the US securities market and virtual assets amid intense expectations of both the consequences of the geopolitical conflict in eastern Europe and the further steps of the US Federal Reserve.
Earlier, the experts of the investment company Arcane Research have already stated that the correlation between BTC and tech stocks has reached the highest level since July 2020.
This situation is quite ironic because, since the emergence of cryptocurrency, it has been positioned as the main tool to protect against inflation and price volatility in traditional markets. However, in recent months, digital assets have been increasingly correlated with stock markets, raising doubts about the success of virtual coins.
Ethereum, Bitcoin’s main competitor, also began Wednesday’s trading session with an uptick and at the time of writing had reached $1,263.
As for cryptocurrencies from the top 10 by market cap, within the past 24 hours, all but a few stablecoins were trading in the red zone. Ethereum lost 5.8%), XRP declined by 3.1%, and Cardano dropped by 0.8%. They were among the top losers.
At the end of last week, all cryptocurrencies in the top ten, except for several stablecoins and XRP, which increased by 20.17%, also reported declines. Ethereum plummeted by 21.12% and topped the list of declines.
According to CoinGecko, the world’s largest aggregator of virtual asset data, over the past 24 hours, among the top 100 most capitalized digital assets, EOS lost 11.69% and took first place in the list of declines, while the best results were shown by Celsius, which increased by 8.53%.
At the end of last week, Ravencoin lost 35.99% and showed the worst results in the first hundred of the strongest digital assets, while Chiliz added 30.17% and showed the best results.
According to CoinGecko, over the past 24 hours, the total market capitalization of cryptocurrencies has dropped to $920 billion.
Notably, it exceeded $3 trillion in November 2021.