Bitcoin, the flagship cryptocurrency, is presently in ruins as it is trying its very best to keep its head above water, but the waves are so strong and crushing that it is almost impossible to do so. Bitcoin has fallen to a one-week low as the interest rate on crypto-oriented endeavors has been increased steeply by the fed.
According to CoinMarketCap, the cryptocurrency is not performing any better than the last week when the price action was still steep and not so very charming. At present, Bitcoin is trading roughly at $23K, and at the time of writing, it is even below $23K, which says a lot about the gruesome performance of Bitcoin and how it is doing nothing to sustain it in the long run.
Whenever there is a market correction or a solid bear run, there are hopes for a reversal or recovery; if you might but seeing the price action of Bitcoin at the moment, it seems that all these hopes are being soiled.
As if there is nothing that can be done to give Bitcoin a reversal, and on top of everything else, Fed has induced a 75-basis-point rate hike which has given many investors nightmares as the liquidity factor for the flagship cryptocurrency has been badly hurt. Risk management is also becoming a nightmare, and at the present interest rate, investors don’t even want to touch Bitcoin or any other cryptocurrency for that matter.
Correlation Between Crypto and Stock Market
An interesting element has been brought further according to which the crypto market is primarily dependent or correlated with the stock market, and any increase or decrease in the Fed financial adjustment rates is going to have an effect on both.
Rising the rates may hurt the overall performance of the stocks, and along with it, the cryptocurrencies such as the likes of Bitcoin, and when the rates are falling, it is a joyful investment opportunity not only for stocks but for the cryptocurrencies such as Bitcoin as well.