Bitcoin prices have been on a rollercoaster ride over the past few weeks, with the cryptocurrency recently hitting a multi-month high of nearly $25,000. The latest price movements are largely driven by news from the U.S. Federal Reserve, which recently released the minutes of its February meeting, hinting that interest rates may rise further to curb inflation. This has led to a risk-off approach amongst investors, which has in turn caused Bitcoin and other cryptocurrencies to pull back.
The top crypto asset is currently trading at $23,082, a 5.4% drop from its recent high. Despite this, the cumulative market cap of all crypto assets remains at $1.06 trillion, and Bitcoin’s dominance rate is 42.1%.
Goldman Sachs analysts anticipate that the Federal Reserve will raise their rates by more than three-fourths of one percent in the upcoming months. The Federal Reserve will be implementing three more 0.25% hikes through March, after which they will take a break in order to evaluate the circumstances.
The on-chain transaction volume for BTC has dropped from a high of 42 billion BTC to 29 billion, suggesting bearish divergence noted from a technical standpoint on the three-day timeframe.
Crypto traders are optimistic that Bitcoin could surge to $25,000 in the short term. However, if the market gets bullish, Bitcoin may surge more than currently predicted, with a Changelly analysis suggesting it could go as high as $137k in 2025.
On Wednesday afternoon, the US Federal Reserve released the minutes from the meeting of banking officials at the beginning of February. The minutes showed that some officials advocated for a 50 basis points increase. In conclusion, the central banking authority decided to raise the rate by 25 basis points. CME Group analysts have predicted a 76% likelihood of the Federal Reserve increasing interest rates by 25 basis points during its March meeting.
In the 24 hours up to 4:30 p.m. in Hong Kong, the worldwide market capitalization of cryptocurrencies dropped by 1.95% to total US$1.09 trillion. At the same time, the total crypto market trading volume declined by 6.33% to US$56.02 billion.
Several assets have experienced significant downward volatility in the last few hours, with Bitcoin’s (BTC/USD) price dropping from its seven-day high of $25,100 to below $24,000.
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