Bitcoin and Ethereum Plunge as Fed Signals Interest Rate Hike ⋆ ZyCrypto

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BTC, ETH and SOL lost value on Wednesday following central banks’ decision to raise interest rates again. Digital assets were not alone, as the stock market also fell after the news, which further signifies the trade correlation. A cross section of digital asset enthusiasts expressed concern that their favorite assets may have squandered their last upside opportunity before the end of the year.

Market leader Bitcoin (BTC) traded above $18,000 for the first time since the FTX crash, much to the delight of users, but the joy was short-lived in the early hours of trading. Wednesday.

BTCUSD Chart by TradingView

Major digital currencies fell following the announcement of an interest rate hike approved by the Federal Reserve, erasing small gains made in recent days. BTC was already flying above $18,000, trading at $18,310, losing 4.77% within hours of the announcement and currently trading hands at $17,404.

Ethereum (ETH) and Dogecoin (DOGE) followed the trend losing around 5.5% and 6.38% respectively. This year hasn’t been great for ETH as it continues to struggle despite all the outlook it had at the start of the year. The altcoin giant is valued at $1,270 with just weeks to go until the end of the year, which has seen it lose more than 50% of its value.

For most of the year, the stock market and the cryptocurrency market traded similarly under the influence of broader macro trends. Yesterday was no different, with the Dow Jones Industrial Average losing 103 points on the news while the S&P 500 fell 0.5%.

With these frequent interest rate hikes, investors continue to move away from high risk assets causing the market to trend down.

Users can’t see the light at the end of the tunnel

The Federal Reserve has used interest rate hikes to counter inflationary market trends in recent months in various regions. Although the recent increase was 0.5 points, the bank signaled further increases in the coming months to bring down inflation.

Most digital asset enthusiasts described this year as unfortunate for the market due to major incidents that hit the industry wiping billions from the market capitalization. The largest crypto market cap is now a shadow of its former self as it struggles below $1 trillion. Even with the current negative trends, some users expressed hope for a better 2023.

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