On July 26, the price of Bitcoin (BTC) fell to a level not seen in more than a week as investor anxiety grew in anticipation of the Federal Reserve raising interest rates.
Bitcoin Slumps
According to TradingView, the leading cryptocurrency is currently trading below $21,000 at $20,955, down 4.26 percent today and a further 7.17 percent over the past week.
As a result, the total market value of the digital asset is currently $400.13 billion. More than a week ago, on July 18, BTC had a market cap of this amount.
Hopes for a long-lasting Bitcoin recovery have been dashed by the dip, which has brought the coin’s trading range back to $19,000 to $22,000.
It’s interesting to note that cryptocurrency consulting firm Eight Global has a more upbeat outlook for the Federal Open Market Committee (FOMC) meeting on July 27. The website stated that the federal funds rate is significant for cryptocurrency because:
“Crypto is correlated to the stock market, and the stock market is impacted by the federal funds rate. Rising rates hurt the performance of stocks while lowering rates make stocks more interesting as investment.”
The majority and most likely outcome, according to Eight Global, is a hike of 75 basis points, although the market has already factored this in.
What to expect tomorrow:
An increase of 75 bps is expected by the majority and is the most likely outcome. A 75 bps hike will either have a neutral or bullish outcome for stocks and crypto, as this has been priced in during the past weeks.
— Eight (@eight_global) July 26, 2022
With the markets correcting, cryptocurrency trading guru Michal van de Poppe stated that he is “looking at a $20.5K-20.7K area to hold for Bitcoin going into FOMC tomorrow.”
