BitcoinBTC) nosedived The market fell below $20,000 psychologically, indicating recession. Rate tightening fears also engulfed it.
The top cryptocurrency reached a low of $19,946, which was last seen in mid July. According to a report by, BTC still had momentum, reaching $20,028 during intraday trades. CoinMarketCap.
The following announcement was made:
“The weakness in risk assets came after Federal Reserve Chief Jerome Powell cautioned against expecting a swift end to its rate tightening. The Fed’s actions on interest rates have caused some investors to forecast more pain for equities.”
Federal Reserve adopted To curb runaway inflation, aggressive interest rate increases were made to raise rates. The June and July increases of 75 basis point (bps) were the highest in 28 year.
The crypto market is affected by tightened macroeconomic conditions. Investors tend to take a risk-off attitude.
Edward Moya is a senior market analyst at OANDA. He pointed out:
“Bitcoin broke below 20,000 as investors expect a weekend full of pessimism from Jackson Hole to drag down sentiment.”
Fed’s continuous interest rate hikes have been a significant drawback to Bitcoin’s much-needed upward momentum, given that the leading cryptocurrency has been trending between the $20K and $24K zone.
Moya noted:
“European and Asian central bankers will likely be much more pessimistic than Fed Chair Powell and that has many traders bracing for a weak open on Sunday night.”
On the other hand, the Fed’s efforts to tackle inflation could tilt the U.S. economy into recession. Many analysts expressed concern about the possibility that there will be a recession.
Bank of America pointed out the possibility of a “mild recession” at the end of this year. Goldman Sachs economists said that there was a one in three chance of the economy sliding into recession within the next year.
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