[Bitcoin Now] Risk Aversion Spreads Ahead of FOMC... Slightly Weakening

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Myunghwan Lee] Bitcoin prices are hovering around the $19,000 mark amid concerns over interest rate hikes ahead of the Federal Open Market Committee (FOMC) meeting.

According to the global cryptocurrency market tracking site CoinMarketCap, as of 2:10 PM on the 22nd, Bitcoin was priced at $19,013 (approximately 26.51 million KRW), down 1.87% from the previous day.

Bitcoin prices have been declining as risk-averse sentiment grows ahead of the FOMC, which sets the US benchmark interest rate. The US Federal Reserve (Fed) will conclude its FOMC meeting on the 21st (local time) and announce the size of the rate hike. Although there were expectations that the Fed might slow the pace after two consecutive 0.75 percentage point hikes, aggressive rate hike forecasts have gained traction following the August Consumer Price Index (CPI) release, which exceeded market expectations.

There is analysis suggesting that Bitcoin prices could fall further after the Fed's benchmark interest rate announcement. Edward Moya, Senior Market Analyst at global investment firm OANDA, said, "As interest rates continue to rise, risk aversion has increased, causing Bitcoin prices to drop," and "Bitcoin prices could test the bottom this week depending on the Fed's decision at the FOMC."

At the same time, Ethereum, a leading altcoin, was priced at $1,337 (approximately 1.86 million KRW), down 1.53% from the previous day. Ethereum, which recently completed the successful Merge update, briefly halted its decline the day before but has resumed its downward trend.

Meanwhile, according to cryptocurrency data provider Alternative, the Fear & Greed Index, which measures investor sentiment, remained at 23 points (extreme fear), the same as the previous day. Alternative's Fear & Greed Index ranges from 0, indicating extreme fear and pessimism about investing, to 100, indicating optimism.