[Bitcoin Now] Impact of US Interest Rate Hike Persists... Falls to $35,000 Range

[Image source=Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] The price of Bitcoin, the leading cryptocurrency, continued its downward trend for the second consecutive day following the U.S. Federal Reserve's (Fed) interest rate hike.

According to the global cryptocurrency market tracking site CoinMarketCap, as of 12:34 PM on the 7th, the price of Bitcoin was $35,850 (approximately 45.55 million KRW), down 1.3% from the previous day.

Bitcoin prices declined as the U.S. stock market fell for two consecutive days due to the impact of the Fed's interest rate hike. On the 6th (local time), the tech-heavy Nasdaq index closed down 173.03 points (-1.40%) at 12,144.66. The Dow Jones Industrial Average fell 98.60 points (-0.30%) to 32,899.37, and the S&P 500 index dropped 23.53 points (-0.57%) to 4,123.34. Earlier on the 4th of this month, the Fed raised the benchmark interest rate by 0.5 percentage points as expected by the market.

Cryptocurrency specialized media CoinDesk explained, "The long-term upward trend of (Bitcoin prices) has weakened, indicating that the price increase this year will be limited." Bloomberg News analyzed that Bitcoin prices have shown synchronization with tech stocks and were pressured due to risk-averse sentiment following the interest rate hike aimed at curbing inflation.

Investor sentiment is also shrinking. The digital asset Fear & Greed Index operated by Dunamu, which runs the domestic cryptocurrency exchange Upbit, recorded 41.15 on the day, indicating a 'neutral' stage. Compared to 44.60 (neutral) on the 30th of last month, a week ago, it fell by 3.45. 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.