Bitcoin Below $21K Ahead of Potential 0.75% Interest Rates Increase by Fed

Bitcoin has dropped below $21k, according to Bitpush Terminal data, as investors prepare for a two-day Federal Reserve meeting starting Tuesday, with indications the Fed will raise interest rates by another 75 basis points on Wednesday afternoon. 

The world’s number one cryptocurrency by market cap started the week in a downward trend and has continued in that direction. Now it sits at $20,909, down 4.03% in the last 24 hours. Here is a live look at the Bitcoin chart. 

Unfortunately for Ether investors, it is doing far worse than Bitcoin percentage-wise, down 8.59% in the last 24 hours. Like Bitcoin, Ether started this week on a downward trend and hasn’t come up for air. It currently sits at $1,388, down from its high last week of $1,600. 

In fact, eight of the top 10 cryptocurrencies by market cap are in the red Tuesday, with only the stablecoins, USDT and USDC, slightly in the green. 

This price action comes as investors are moving toward risk-off mode ahead of the two-day Federal Reserve meeting. 

The last time the Fed met in June, they hiked interest rates up by 75 basis points, or 0.75%, which was the highest increase in nearly 30 years. Now the Fed seems poised to replicate that previous hike. The interest rates currently sit between 1.5% and 1.75%. 

In general, it is believed that higher rates incentivize investors to sell assets and to take profits, which is what is happening across the crypto market. In the past few days, 74,087 traders were liquidated with total liquidations coming in at $209.43 million. 

The crypto market Fear and Greed Index mimics the current downward trend, with a fear level of 26. While this is slightly worse than yesterday’s and last week’s “30,” it is significantly better than last month’s extreme fear reading of “14.” 

Author: Tyler Irvin

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