Why Investors Begin Withdrawing From Crypto Markets Ahead Of Fed Meeting. Investors are starting to count down the time to a 75 basis point interest rate hike that is expected to be announced by the United States (US) central bank or the Federal Reserve (the Fed) later this week. Ahead of the announcement, investors began to back away from riskier assets, pushing bitcoin well below $22,000 for the first time in a week.
The largest cryptocurrency by market cap recently traded at around USD 21,600 or around IDR 323.3 million, down nearly 5 percent over the last 24 hours.
Bitcoin began to sink Tuesday morning as investors again fretted about the Federal Reserve and other central banks’ ability to tame inflation without throwing the economy into a steep recession.
Ethereum, the second-largest cryptocurrency by market cap, recently changed hands below $1,500, down more than 8 percent over the same period and topping its most recent high above $1,600.
Oanda Americas Senior Analyst Edward Moya said the crypto market was broadly weak as investors awaited the outcome of the Fed meeting.
“Cryptocurrencies are broadly weaker as investors await a (Federal Open Market Committee) decision that is likely to end with a 75 basis point rate hike and reaffirm commitment to fighting inflation,” Moya said. /7/2022).
Why Investors Begin Withdrawing From Crypto Markets Ahead Of Fed Meeting. “Elevating geopolitical tensions may provide some underlying support for the dollar, which could dampen risk appetite, which would weigh on cryptocurrencies.”
Crypto and Stock Correlation
The crypto’s decline diverged somewhat from the equity index, which traded sideways on Monday. The tech-focused Nasdaq fell a few fractions of a percentage point but the S&P 500, which has a heavy tech component, declined slightly.
Aside from monetary policy, investors will also be eyeing earnings from Amazon, Alphabet and parent company Facebook Meta Platforms to gauge the severity and speed of the expected economic contraction.
They hope the move will be gradual, at least a soft landing that will show that the Fed has made progress in taming inflation.
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Previously, the price of bitcoin and other top cryptocurrencies was observed to have a uniform movement on trading Tuesday, July 26, 2022. The majority of cryptocurrencies were again stuck in the red zone ahead of the Fed’s meeting.
Based on data from Coinmarketcap, Tuesday morning (7/26/2022), the cryptocurrency with the largest market capitalization, Bitcoin (BTC) weakened 4.19 percent, but still gained slightly 0.87 percent a week.
Currently, the Bitcoin price is at the level of USD 21,884 per coin or equivalent to Rp. 327.5 million (assuming an exchange rate of Rp. 14,969 per US dollar).
Ethereum (ETH) also weakened this morning. Over the past 24 hours, ETH plunged 7.78 percent. However, it rose slightly 0.34 percent in the week. With that said, ETH is currently at USD 1,498 per coin.
The next cryptocurrency, Binance coin (BNB) also plummeted today. In the last 24 hours BNB fell 4.91 percent and 2.37 percent for the week, respectively. That makes BNB priced at USD 251.56 per coin.
Then Cardano (ADA) weakened again. In the past day the ADA slumped 6.13 percent, and 2.72 percent for the week. Thus, ADA is at USD 0.4905 per coin.
Meanwhile, Solana (SOL) is following in the footsteps of other cryptocurrencies that have weakened. During the last one day, SOL fell 8.85 percent and 5.86 percent a week. Currently, the price of SOL is at the level of USD 37.88 per coin.
Why Investors Begin Withdrawing From Crypto Markets Ahead Of Fed Meeting. XRP also experienced a decline this morning. XRP is down 5.56 percent in the last 24 hours, and 3.59 percent in the week. That way, XRP is now priced at USD 0.3437 per coin.
StablecoinTether (USDT) and USD coin (USDC), both weakened 0.01 percent today. This made the USDC price drop slightly to the level of USD 0.9999, while USDT was still at USD 1.00.
While Binance USD (BUSD) fell 0.23 percent in the last 24 hours, which sent its price down to as low as USD 0.9989.
As for the overall crypto market capitalization in the last 24 hours, it still stands at USD 1 billion.