Bitcoin Struggles to Keep Near $40,000 in the Wake of Fed Update
- Bitcoin struggles as price declines and dips below $38,000, poised to end the week lower by 4%
- Fed statement yet to reflect in Bitcoin’s valuation in the long-term
Bitcoin Struggles As It Continues Dipping Lower
Bitcoin is trading lower on Friday as crypto market participants struggle to maintain an upside momentum after the Federal Reserve announced it will raise the interest rates by late 2023. On Wednesday, the day of the Federal Reserve press conference, risky asset like stocks and commodities dropped substantially when Fed Chair Jerome Powell updated the Fed’s stance toward the economy. Bitcoin, on the other hand, remained robust as its price barely budged while other markets were in decline.
Late on Wednesday, however, bitcoin’s price started to slide and closed the day lower by 3.57%. On Thursday, similar to other assets, bitcoin added to its Wednesday losses and declined further by 2%. Today, the digital asset is trading relatively flat but still to the downside as the crypto market lacks the needed catalyst to fuel another buying frenzy.
What’s Happening In The Wider Market?
The great debate is once more put to the test. Market participants are now divided between the hope that bitcoin’s trait as a hedge against inflation will spare its value from the traditional market sell-off. They expect the digital currency will remain resilient while stocks and commodities give in to the threat of higher inflation and higher interest rates.
Outperforming traditional markets, according to crypto opponents, will not materialize for bitcoin in a high-inflation environment. If inflation continues to rise, some analysts expect that bitcoin will correlate to stocks through the turbulence.
On the week, bitcoin remains subdued below the $40,000 mark. Monday to date, the largest token with a market cap of $700bn, is trading negative by 4%. Today’s price skid could mark a third straight day of losses for the orange coin if it closes below the opening level of $37,700.
Other coins are also in decline. Ether is trading in its fourth consecutive day of losses. The Ethereum token’s price now hovers near the $2,320 level, down 9% on the week. Dogecoin is also lower this week, down 7% Monday-to-date, currently floating around $0.30.
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