Bitcoin price and traditional markets continue to fall as the Fed raises the possibility of raising interest rates sooner

By Selena On Jun 19, 2021

In the past 24 hours, at one point the Bitcoin price dropped to $35,130. The cryptocurrency hit a five-day low after baselining for most of the week as the dollar increased in value, a similar story to US stocks and certain commodities. At press time, BTC is trading at $36,186.

BTC/USD 4-hour chart | Source: TradingView

Bitcoin price and traditional markets continue to fall as the Fed thinks it will raise interest rates sooner than expected

Federal Reserve Bank of St. Louis leader James Bullard indicating that he expects the first interest rate increase to happen in late 2022.

James Bullard, the president of the United States Federal Reserve Bank of St. Louis

Bullard suggested that in the future, inflation is running at 3% this year and 2.5% in 2022 before drifting back down to the Fed’s 2% target.

Bullard’s comments were even more influential than last Wednesday’s comments by Fed Chairman Jerome Powell, who indicated that a rate hike would come in 2023. Powell’s comments triggered a wave of sell-off in financial markets as the US dollar appreciates. At that time, Bitcoin, gold, and some US stocks continuously fell.

And now, that story continues.

Today’s selling dragged BTC below the critical $36,000 support, leading traders to forecast $32,500 as the next stop before Bitcoin revisits the swing low at $30,000.

Moreover, this decline is not solely due to the Fed. Fears of a further downturn for BTC have been building for weeks with much of the discussion focusing on the approaching death-cross and its implications for Bitcoin’s future.

Death cross may happen in few days guys…be ready. strong bearish signal. Warning for traders$Btc #Bitcoin pic.twitter.com/RaBVZPKOnZ

— Mīss ÇRypTö (@infoNataliya) June 17, 2021

Additionally, these technical factors combined with the news that Chinese authorities are shutting down crypto miners or the most recent rug pull on the Iron Finance suggested by billionaire investor Mark Cuban has made traders feel concerned about the current drop in Bitcoin price.

Crypto Fear and greed index | Source: Alternative.me

As you can see, the Crypto Fear and greed index dropped to 23, recording extreme fear and continuing the trend of the past month.

In the wake of a Fed reset, the Dow Jones Industrial Average benchmarked its worst week in six months. Larger technology companies like Apple even fell, pulling the tech-heavy Nasdaq 100 down with it. The S&P 500 and NASDAQ were also hard, closing the day down 1.31% and 0.92% respectively.

US stocks fell for a fourth day | Source: Investing

The altcoin market clearly couldn’t be better

At press time, if BTC records a 4% drop on the day, Ethereum is in sync. Prior to that, ETH dropped more than 13%, to $2,137. At press time, however, the price recovered a bit more at $2,250, according to CoinMarketCap.

The biggest drop on the day probably goes to Amp (AMP) – down 33% from the all-time high of $0.1211 set on June 16.

In the top 200 cryptocurrencies, the three names showing the best gains on the day are ZKSwap (ZKS) with a 14% increase in Gnosis (GNO), up 7.4%. In which, the most special is Perlin (PERL) with an increase of 15% on the day. In fact, despite the recent downturn, PERL rallied 140%, from a low of $0.052 on June 8 to a high of $0.134 on June 18 as 24-hour average trading volume increase from $3 million to $122 million.

PERL/USD 7-days chart | Source: CoinMarketCap

The reason for the price increase probably comes from the following three reasons, the first is the release of the PERL.eco registration ledger, the second is the launch of PerlinX on the Binance Smart Chain. And finally, the attractive staking options allow token holders to earn a yield on various cryptocurrencies.

The overall crypto market capitalization stands at $1,511 billion. Bitcoin Dominance hovers at 44.8%.

You can see the Bitcoin price here.

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