[Bitcoin Now] Downtrend Continues Amid Negative News... Investor Sentiment Also ↓

[Image source=Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] The leading cryptocurrency Bitcoin is showing a downward trend. Analysts attribute this to concerns over the U.S. Federal Reserve's (Fed) interest rate hikes and the prolonged Ukraine crisis.

According to the global cryptocurrency market tracking site CoinMarketCap, as of 11:14 a.m. on the 11th, Bitcoin's price was $42,387 (approximately 52.23 million KRW), down 0.82% from the previous day.

Bitcoin prices are declining due to the Fed's indication of interest rate hikes and the prolonged Russian invasion of Ukraine. On the same day, Bloomberg reported, "Cryptocurrencies including Bitcoin have declined due to concerns over tightening monetary policies," and noted that the Bitcoin 2022 Conference held in Miami, Florida, was not sufficient to reverse this trend. Earlier, on the 6th of this month (local time), the Fed announced a big step of raising the benchmark interest rate by 0.5 percentage points at once and signaled quantitative tightening. According to the minutes of the March Federal Open Market Committee (FOMC) meeting released by the Fed, participants generally agreed to reduce the Fed's holdings by $60 billion in Treasury securities and $35 billion in mortgage-backed securities (MBS) monthly. Many FOMC participants mentioned that "if inflationary pressures increase or strengthen, it may be appropriate to raise the benchmark interest rate by 0.5 percentage points or more at future meetings."

Joe DiPascal, CEO of BitBull Capital, also analyzed, "There was some relief over the past weekend, but Bitcoin trading volume was low," adding, "Bitcoin prices are expected to remain under pressure until they surpass $48,000 and may struggle around the $40,000 level for several weeks."

First Republic Bank, a private banking specialist, stated in its weekly international economic outlook on the 8th, "The macroeconomic situation is likely to worsen before it improves," adding, "The rise in energy prices due to the invasion has affected prices across all sectors." It further noted, "Considering rising costs and geopolitical conflicts, inflation is expected to increase further in the coming months."

Meanwhile, the Digital Asset Fear & Greed Index by Dunamu, which operates the domestic cryptocurrency exchange Upbit, recorded 50.57, indicating a 'neutral' stage. This is a decrease of 0.14 compared to 50.71 (neutral) the previous day. Dunamu's Digital Asset Fear & Greed Index is divided into stages of 'Extreme Fear (0?20)', 'Fear (20?40)', 'Neutral (40?60)', 'Greed (60?80)', and 'Extreme Greed (80?100)'. The greed direction indicates increased interest in buying by market participants, whereas moving toward fear indicates a fear of asset decline, leading to market exits and a chain reaction of price drops.