As the Fed Raises Interest Rates, BTC and ETH Prices Are in a Bind
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Bitcoin and Ethereum values continue to struggle to find support despite a brief rally and recovery on Thursday. This week, the Fed’s 0.75% interest rate hike significantly accelerated the decline in global and cryptocurrency markets.
With stocks opening lower on Friday, with the Dow Jones down 1.45%, the S&P 500 down 1.68% and the NASDAQ down 1.13% in the first few hours after the open, it’s not unexpected that the cryptocurrency market hasn’t improved much. Let’s take a look at the recent news that will affect Bitcoin, Ethereum and global markets on Friday.
- After Thursday’s small rally, support remains elusive for Bitcoin and Ethereum.
- The recent bear market has been merciless to bitcoin miners, with Compute North becoming the latest victim, filing for Chapter 11 bankruptcy after paying around $500 million.
- As miners leave the blockchain and sell off their ETH, Ethereum struggles after the merger; it will likely take several months for prices to recover.
- Although cryptocurrency projects are still developing and innovating, it seems unlikely that a significant upswing will develop this year due to world politics, the pandemic and the state of the global economy.
General market news update
The $20,000 support, which has been a crucial level for Bitcoin in recent months, is still struggling to hold. Investors are hesitant to invest and open long-term positions in volatile assets such as cryptocurrencies due to the bearish trend and the state of the global economy.
Major Bitcoin mining operations are one of the industries most affected by the cryptocurrency bear market. Compute North is the latest company to file for bankruptcy, with debts of up to $500 million.
According to a Yahoo Finance story:
“Compute North, one of the largest operators of crypto-mining data centers, filed for bankruptcy and revealed that its CEO has resigned as the cryptocurrency price gap weighs on the industry.”
Due to mining difficulties and a more than 50% drop in prices in recent months, the company has not been able to restore profitability after funding around $385 million in February.
In other encouraging news, Michael Saylor has maintained his bullish BTC outlook, predicting that Bitcoin could reach $68,000 in four years and over $500,000 in the next ten years.
It is clear that Bitcoin is still affected by stock market price movements and for some reason has a strong correlation with global markets. We are likely to see significant growth in cryptocurrencies such as Bitcoin and Ethereum if the global economy returns to a healthy level.
Ethereum Market News Update
Speaking of Ethereum, it seems that despite the success of the merger and the network’s ability to accommodate a significantly larger user base in the coming months, the fact that many miners have left the network and are selling their ETH is having a huge negative impact on value. of property.
Some expected Ethereum to rise after the merger, but in reality Ethereum only experienced significant losses. At the time of the merger, Ethereum was trading at $1,700, but is currently struggling to maintain support at $1,300.
It may take several months for Ethereum miners to accept their loss and another POW coin like Ethereum Classic. Currently, Ethereum is expected to trade in the low $1,000s for the foreseeable future. Furthermore, it is unlikely that ETHUSD will rise above $2,000 until the price of Bitcoin and the stock market improve significantly.
Patience is essential when it comes to the cryptocurrency market, as it is normal for the market to be long, stretched, followed by a short bull run during which long-term investors are rewarded with a 5-10x profit in a couple of years. months.
Overall, the crypto community is growing and innovating; therefore sooner or later the gloomy market mood will change. While 2022 may be “cursed” and we’re not going to experience a significant uptick this year, next year will be a fresh start and we may finally start to see a recovery if global political unrest, the Covid-19 pandemic and the state of the economy improves.
Disclosure: This is not trading or investment advice. Always do your research before buying cryptocurrency or investing in services.
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