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The cryptocurrency market is in a fever ahead of the announcement of the Fed’s decision

Bitcoin began with a correction on Wednesday morning; by the time of writing, its value had dropped to $21,282.

According to CoinMarketCap, a website for tracking the value of digital assets, over the past day, the lowest price of bitcoin reached $20,776, and the highest was $21,266.

The key reason for the high volatility of bitcoin in recent days, cryptanalysts call the July meeting of the US Federal Reserve to combat record inflation by raising interest rates. The announcement of the results of the meeting of representatives of the US central bank is scheduled for today.

So, the day before, the experts of the analytical company Kaiko reported in their report that the volatility of BTC significantly soared in the first hours of the Fed meeting.

According to analysts from Kaiko, a high correlation of bitcoin with the decisions of the Fed was recorded in the summer of 2021, which indicates that the cryptocurrency market has long been influenced by key macroeconomic indicators.

So, when in May 2022 the Fed increased the rate range to 0.75-1% per annum, the value of the first cryptocurrency sharply overcame the level of $40,000, but on the same day it collapsed below $36,000, launching the process of a protracted correction.

In June of this year, when the US central bank raised the key rate to 1.5-1.75%, the BTC instantly reacted with spectacular growth.

Experts are confident that in the coming months, the digital asset market will respond even more strongly to the speeches of the world’s central banks, because often an increase in the interest rate sharply reduces the ability of investors to invest in risky assets such as virtual currency.

Altcoin Market

Bitcoin’s main competitor, the Ethereum altcoin, also started the trading session with a correction and by the time of writing the material had dropped to $1,438.

As for cryptocurrencies from the top 10 by capitalization, over the past day, all coins, except Cardano, were traded in the green zone. At the same time, the best results here were shown by the Binance Coin digital asset (+3.88%), and the lowest results were shown by the Cardano mentioned above (-0.71%).

During the past week, all cryptocurrencies from the top ten, except for a number of stablecoins, declined in price. At the same time, the greatest losses were recorded at Solana (-20%).

According to CoinGecko, the world’s largest aggregator of data on virtual assets, over the past day, among the top 100 most capitalized digital assets, the Monero coin topped the list of leaders (+8.2%), and Radix took the first place in the drop list (-4.9%).

According to the results of the past week, the BitDAO coin showed the best results among the hundreds of the strongest cryptocurrencies (+5.6%), and the worst – Arweave (-21.2%).

According to the website for tracking the value of digital assets CoinMarketCap, over the past day, the total capitalization of the crypto market has fallen below the key level of $1 trillion. So, at the time of writing, this indicator is at around $983 billion.

Forecasts of Cryptanalysts

The unpredictable behavior of bitcoin forces experts to make the most multidirectional predictions about its future. Blockchain analyst Matthew Hyland confidently stated that by December 2022 bitcoin is able to set a new historical record of $100,000 amid growing demand for altcoins and their shortage.

Recently, the CrowdWisdom portal suggested, although not so positive, but still quite encouraging scenario for bitcoin growth. According to the company’s analysts, the cost of the first cryptocurrency will reach $35,746 in 2022.

Cryptanalyst Ouriel Ohayon also sees the prospects for a positive movement of bitcoin. The expert believes that record volumes of purchases of digital assets on cryptocurrency exchanges indicate the high potential of bitcoin.

However, not all participants in the virtual coin market believe in the bright future of bitcoin. More skeptical crypto enthusiasts believe that bitcoin has not yet reached its bottom and ahead of it is a collapse to $8,000. Guggenheim Global Chief Investment Officer Scott Meinerd recently spoke about this forecast. He calls the tight monetary policy of the Fed as the key reason for the decline of BTC to such extreme levels.

Previously, the well-known analyst Matthew Hyland suggested that the growth of bitcoin realized in mid-July is just a temporary correction after a prolonged fall.

The opinion of a colleague is shared by the CEO of Silvergate exchange Alan Lane, who said the day before that the crisis of the crypto industry is not over and may soon become more painful. According to the head of Silvergate, in the near future, most exchanges and cryptocurrency funds will continue to experience serious financial problems.

Crypto expert Nicholas Merten is more positive and claims that the digital asset market is ahead of a sharp rise that will lead to liquidations of the BTC bears. In the near future, Merten predicts a rally to $30,000 on the crypto market. Despite the fact that the expert expects confident growth from bitcoin in the short term, he doubts that the main virtual coin will reach the bottom, explaining that macroeconomic conditions are still significantly pressing on the crypto market.

Meanwhile, the head of the Binance exchange Changpeng Zhao said that despite the failures of many crypto projects, the number of traders and companies in this industry continues to increase permanently. In addition, the CEO stated that the trust of institutions, as well as the popularity of decentralized finance platforms and non-interchangeable tokens, is also constantly and steadily growing.

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