Bitcoin, the world’s most popular cryptocurrency, has fallen sharply in price, reaching a two-month low. The second most valuable cryptocurrency, Ether, has also experienced a similar downward trend in value.
On March 10, Bitcoin briefly fell below $20,000 for the first time in nearly two months, hitting a low of $19,918.
However, the aggressive stance of the Federal Reserve has weighed on the crypto market, indicating that the next interest rate hike will exceed market consensus, causing uncertainty among traders and investors.
In addition, recent government crackdowns have further contributed to the cryptocurrency market’s decline, making it difficult for the sector to gain positive momentum.
Risk sentiment in the cryptocurrency market
The global cryptocurrency market is experiencing a downturn, with various cryptocurrencies experiencing significant losses. Investor confidence was dampened by concerns about future interest rate hikes and regulatory uncertainty, contributing to a global market decline.
It is worth noting that the recent statements of the chairman of the Federal Reserve System, Jerome Powell, have increased the uncertainty in the market. Powell’s hawkish stance on a possible interest rate hike has raised concerns about the potential impact on the cryptocurrency sector.
In addition, recent regulatory actions against major players such as Paxos and Binance, as well as the SEC’s crackdown on centralized staking, have added to the negative sentiment in the cryptocurrency market.
This has added to the uncertainty surrounding the regulatory environment for cryptocurrencies, which has historically been a contentious issue for the industry.
The appreciation of the US dollar contributes to the pressure on the crypto market
On the other hand, the strengthening of the US dollar became another factor of negative pressure on the cryptocurrency market. Since the recent statements of the chairman of the Fed Jerome Powell on the prospect of interest rate hikes to curb inflation dominated market sentiment, the US currency strengthened. As a result, the dollar rose against key currencies.
So, the trend is upward exchange rate of the US dollar has also affected the cryptocurrency market, contributing to recent losses in Bitcoin and other cryptocurrencies.
When the US dollar is strong, investors tend to shift their funds from riskier investments like cryptocurrencies to safer assets.
The overall market sentiment is cautious as Powell’s comments have created uncertainty among traders and investors. Given the possibility of further interest rate hikes, many are watching closely for any further clues from the Federal Reserve as to its intentions.
$1 billion worth of Bitcoins seized from seized US wallets
In March 2023, approximately 50,000 bitcoins worth $1 billion were transferred from accounts seized by law enforcement in the United States. However, most of the transfers were internal, with 9,861 BTC transferred to Coinbase and the rest split between two wallet addresses.
Thus, the unexpected transmission raised concerns among traders and investors about potential market turbulence in the future. It is worth noting that the impact of such a mass transfer of BTC is uncertain, as it is not known whether the recipients will sell the funds or keep them.
However, the transfer could potentially add to the selling pressure in the market, pushing down BTC prices. On the other hand, if the funds are held by the beneficiaries, the circulating supply of BTC may decrease, potentially causing the price to rise.
Bitcoin price
The real-time Bitcoin price is $19,969 and the 24-hour trading volume is $36 billion. Bitcoin is down 8.16% in the last 24 hours. It ranks first on CoinMarketCap with a real market capitalization of $385 billion.
Bitcoin is trading below $21,000 and is facing resistance at $20,400, with major resistance around $22,000. A close above $22,600 could trigger a bullish momentum towards $23,000.
Failure to get $21,000 could see a drop to $19,800 or even $18,400.
