Bitcoin drops for fourth straight day on US Fed’s hawkish stance

Bitcoin and many crypto assets fell for a fourth straight day as investors continued to be perplexed by recently released, frequently conflicting economic indices and business earnings reports.

The market capitalization of the leading cryptocurrency is currently around $23,400, down about 3% on the day and far from the $25K level it achieved on Sunday for the first time since late spring. The price of ETH was recently trading at $1,850, down about 2.8% over the same time period after reaching $2,000 several times over the previous week.

The global crypto market valuation at the time of writing was $1.12 trillion, a 3.11% decrease over the last day.

Markets struggled on Wednesday with the U.S. Federal Reserve’s minutes from the Federal Open Market Committee (FOMC) meeting last month, which is central bankers’ customarily cryptic language, suggested that the Fed would keep raising interest rates but appeared open to doing so in the near future.

Despite a healthy job market and very low unemployment, the inflation rate was still too high, according to the minutes from the US central banking authority’s meeting on July 26–27, and there was no sign that it would soon go down.

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Participants noted that inflation was still much higher than the Committee’s long-term target of 2%, according to the minutes. It also said that future data would determine when it would be necessary to “at some point” slow the rate of rate hikes.

Crypto outlook

  • The Merge, which will convert the Ethereum blockchain from proof-of-work to the quicker, more energy-efficient proof-of-stake protocol, has been the subject of intense expectation in recent weeks, sending the second-largest cryptocurrency by market capitalization skyward.
  • The majority of other cryptos were in the red. The popular meme coins DOGE and SHIB, which had risen over the previous few days, were both down more than 5%, and AAVE was down more than 8% at one time.
  • Information that is frequently erroneous and misleading continues to be a problem for the cryptocurrency sector. Late on Wednesday, speculations on Twitter that the multi-signature wallet of Optimism, the native token for the Ethereum layer-2 blockchain had been hacked, caused a temporary market fall.

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