As investors sold risky assets as the Federal Reserve reaffirmed its commitment to an aggressive tightening course, Bitcoin fell below $20,000 on Monday.
Bitcoin drops below $20,000
According to Coin Metrics data, the biggest digital currency in the world fell 5% from Friday’s close to overnight hit a low of $19,526, a level not seen since July 13. Ether fell to $1,423, its lowest point in a month, while other significant digital coins also saw a sell-off.
The significant sell-off in American markets that followed Fed Chairman Jerome Powell’s tough pledge to contain inflation in Jackson Hole caused the sharp decrease in cryptocurrency prices.
After Powell stated that he anticipates the central bank to keep raising interest rates in a way that would “some harm” to the American economy, the Dow Jones Industrial Average dropped 1,000 points on Friday. On Monday, further losses were predicted by futures.
Crypto Market Facing a lot of Issues
According to Edward Moya, senior market analyst at Oanda, bitcoin declined after Fed Chair Powell reiterated that the Fed will tighten policy to reduce inflation without faltering. Risky assets are underperforming because Powell will continue to wage an aggressive war against inflation even if it will slow the economy down.
Bitcoin experienced its third consecutive week of declines last week, falling more than 3%. The price of the cryptocurrency has decreased by more than 50% so far this year and is still 70% behind its November 2016 high of $68,990.90.
The algorithmic stablecoin terraUSD’s demise, which set off a series of events that resulted in the bankruptcy of loan platform Celsius and hedge fund Three Arrows Capital, is just one of the problems plaguing the cryptocurrency market.
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