The cryptocurrency market has reacted bearishly to the news of the interest rate hike by the United States Federal Reserve, announced by its chairman, Jerome Powell.
The cryptocurrency market capitalization has fallen below $900 million due to an 8.13% drop in the price of Bitcoin, from its intra-day high of $19,950 to currently trade $18,450 as of the time of this writing.
Asides from Bitcoin, we have also seen a significant decline in the price of Ethereum and other altcoins. Ether, the native token of the Ethereum blockchain is down over 6% for the day, currently trading $1,260.
Ether is also down over 20% in the last seven days as the token is reacting to a sell the rumour set up caused by the anticipation of the network’s upgrade into a Proof-of-Stake (PoS) consensus mechanism.
In addition to a 0.75% basis point hike, the Federal Reserve, after the Federal Open Market Committee’s statement, also set its 2022 target interest rate at 4.4%, leading Bitcoin analysts to forecast further downside for BTC.
The decline in the market mirrored a similar sudden correction in the U.S. stock market, with the benchmark S&P 500 dropping 0.5% minutes after the Fed update.