On Thursday, Bitcoin prices fell after the U.S Federal Reserve indicated further interest rate hikes ahead in 2023, while investors continue to monitor the fallout of cryptocurrency exchange FTX.
The biggest cryptocurrency topped $18,000 on Wednesday, the highest level in more than a month, but the price dropped by 2% to $17,406.33 after several rate hikes by central banks.
Ether also fell to $1,268.84 or 2% after hitting a higher level in more than a month on Wednesday at $1,350.
The U.S Federal Reserve increased its benchmark interest rate by 50 basis points to the highest level in 15 years on Wednesday, and next year there will be further hikes. Bitcoin and U.S. stocks have fallen too.
“Overall, bitcoin remains in an uptrend following its mid-November bottom,” Lyn Alden, founder of Lyn Alden Investment Strategy said.
“The year 2022 was characterized by a hawkish Fed and valuation reductions on equities and other assets. Going forward into 2023, I think a slowdown in corporate earnings, rather than valuation compression, is likely what will keep pressure on equities while potentially allowing monetary assets such as bitcoin and precious metals to stabilize.” she added.
Market sentiment in the crypto space remains low as investors continue to observe the impact from the fallout of FTX. Meanwhile, Sam Bankman-Fried, former founder of FTX, has been arrested and accused. However, in the overall picture, crypto prices have been relatively steady since the crash in FTX.