The price of Bitcoin (BTC) gained strength last week and reached US$27,300. However, part of this strength was lost throughout Wednesday night (20), shortly after the announcement of the interest rate decision in the United States. Although the Federal Reserve (Fed) decided to maintain the interest rate, the central bank did not rule out further increases in 2023.
Furthermore, the Fed also stated that it can keep interest rates at a high level for longer. Thus, most markets closed the day falling, and Bitcoin also entered this path. The cryptocurrency even remained stable shortly after the decision, but then lost strength.
In the last 24 hours, BTC registered losses of 1.1% and, as a result, fell to US$26,795. In Brazil, the price also fell 1.1% and reached R$130,500. The price of Ether (ETH) suffered losses of 2.2% and fell to US$1,593, or around R$7,780 in national values.
Solana (SOL) opened the day with a drop of 2.4%, but managed to return to the Top 10 because TON suffered losses of 6.6% and lost its place. XRP recorded the biggest loss of the day with a drop of 2.8%.
The market value of cryptocurrencies fell 1% and reached US$1.09 trillion (R$5.36 trillion), with a trading volume of US$29.3 billion – an increase of 6.36%. The dominance of Bitcoin and Ether stabilized at 47.4% and 17.6%, respectively, totaling 65% of the market.
Fed Tone Slammed Bitcoin
The Fed’s decision to maintain interest rates was expected by the market and, in this sense, there was no surprise. However, the central bank’s statement highlighted that the Fed board does not rule out further interest rate increases, especially if inflation does not fall sharply.
However, investors’ biggest fear was when the Fed stated that it could leave interest rates at this level for longer. The statement states that the first drops should only occur at the end of 2024. In other words, the US economy would have to live with practically two years of high interest rates.
“Even though the Fed kept the North American interest rate in the range of 5.25-5.5%, the market did not like knowing that it should only be lowered at the end of 2024, and began to price more a year of very high interest rates just yesterday, with North American stock markets closing all negative. My expectation for the end of the year is for more drops in the balls and a consolidation of Bitcoin, oscillating between US$ 24,000 and US$ 28,000”, said Fernando Pereira, from Bitget.
Futures and settlements
Futures and settlement volumes have seen moderate increases over the past 24 hours, according to data from Coinglass. In futures, volume reached US$65.4 billion, up 4.93%, and Binance was in the lead with US$11.62 billion. Bybit took second place this time, generating US$4.47 billion.
Investors who bet on the rise or fall of cryptocurrencies liquidated US$69.7 million, an increase of 6.72%, of which US$51 million came from bets on appreciation. BTC liquidated nearly $21 million while ETH caused losses in excess of $12 million.
The largest single liquidation reached US$968 thousand and came from a long ETH position on Binance. In total, 28,683 traders were liquidated in the last 24 hours.