Bitcoin and Ethereum Take a Plunge as Fed Signals More Rate Hike ⋆ ZyCrypto

• BTC, ETH and SOL fell in value on Wednesday following the central bank’s decision to raise interest rates again.
• Digital assets were not alone as the stock market also fell on the news, further indicating trade correlation.
• A cross-section of digital asset enthusiasts expressed concern that their favorite assets may have squandered their last opportunity for a rally before the end of the year.

Market leader Bitcoin (BTC) traded above $18,000 for the first time since the FTX crash, much to the delight of users, but the joy was short-lived in the early hours of Wednesday.

Major digital currencies fell on news of an interest rate hike approved by the Federal Reserve, wiping out small gains in recent days. BTC already flew above $18k, traded at $18,310, lost 4.77% a few hours after the announcement and is currently changing hands at $17,404.

Ethereum (ETH) and Dogecoin (DOGE) followed the trend, losing around 5.5% and 6.38% respectively. This year has not been good for ETH as it continues to struggle despite all the prospects it had at the start of the year. The altcoin giant is valued at $1,270 just a few weeks before the end of the year, which has seen it lose over 50% of its value.

For most of the year, the stock market and cryptocurrency market have traded similarly under the influence of broader macroeconomic trends. Yesterday was no different, with the Dow Jones Industrial Average shedding 103 points on the news while the S&P 500 fell 0.5%.

With these frequent rate hikes, investors continue to move away from high-risk assets, causing the market to take a bearish trend.

Users cannot see the light at the end of the tunnel

The Federal Reserve has used interest rate increases to counteract inflationary trends in the market in recent months in various regions. Although the recent increase was 0.5 points, the bank has signaled more increases in the coming months to push inflation back.

Most digital asset enthusiasts have described this year as unlucky for the market due to major events that have hit the industry, wiping billions from the market value. The larger crypto market cap is now a shadow of its former self as it struggles below $1 trillion. Even with the current negative trends, some users have expressed hope for a better 2023.