Bitcoin continues to fluctuate around the $50,000 level as it fell today to trade around the $46,700 range, and over the course of this week the leading cryptocurrency is trying to surpass the $50,000 psychological support level that it crossed last weekend, but so far it has failed to break it, in light of the decline in investor sentiment towards The crypto market, after global central banks headed towards tightening monetary policy and raising interest rates, in order to control the rising inflation rate.
This week, Bitcoin failed to chart any significant gains and fell by 2.4%, despite the US raising the debt ceiling and leaving interest rates unchanged. Despite the Federal Reserve leaving rates unchanged and increasing the country's debt ceiling by $2.5 trillion.
The total market value of digital currencies lost nearly $67 billion, bringing the total market size to $2.17 trillion, with most digital currencies declining led by Bitcoin and Ethereum.
Bitcoin falls after US interest rate decision
Bitcoin was heading towards the green at the end of last week when the price crossed $50,000 on Sunday, this gave the market some respite and brought hope that it was time for a rebound, but the markets turned in the opposite direction, turning everything in the red, on Monday it fell The leading digital currency has reached nearly $46,000.
On December 14 and 15 the Federal Reserve held a meeting, and Congress voted again to increase the country's debt ceiling while leaving rates unchanged. Briefly, the cryptocurrency is trending lower again, and Bitcoin is trading at around $46,500, down by 2.4 % in the past seven days.
Global markets have also fallen over the past five days with the Nasdaq Composite Index down by 2.5% while the S&P 500 Index is down by 1.2%.
The altcoin market is also deep in the red, Bitcoin has fared better than a lot of altcoins, with Ethereum dropping 7.6% and BNB dropping 8.4%.
It is still interesting to see how the market will turn out over the coming days as the Christmas season enters, which is historically bullish for Bitcoin.
One market expert says that macroeconomic concerns such as inflation and the monetary policies of the Federal Reserve are causing some cryptocurrencies to sell off.
For example: Last Friday, the Bureau of Labor Statistics reported that the Wholesale Price Index rose by 9.6% during the month of November, marking the largest rise since the 1980s.
While bitcoin was jumping between 3% and 4% prior to the announcement, the asset has fallen by more than 7% since then, moreover, the leading cryptocurrency is trading at 30% %, below its all-time high in mid-November, which is an indication that investors are becoming more fearful. From Bitcoin as a hedge against inflation.
Meanwhile, the Federal Reserve indicated that it will expedite the termination of the asset purchase program, which is likely to cause another liquidity crisis for cryptocurrencies.
The macroeconomic concerns he mentioned earlier seem to be pushing investors towards stablecoins and other less volatile crypto assets.
According to trading data, stablecoin conversion volumes increased by a combined $57 billion on Tuesday from $10 billion to $20 billion, which are assets of normal daily volume, so the conversion volume could create more opportunities for investors looking to buy the dip.
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