The crypto market largely unaffected by the ECB’s decision to raise interest rates by 50 bps
The crypto market is largely unaffected by the European Central Bank’s latest 50 basis point interest rate hike, with flagship cryptocurrency Bitcoin only seeing a minor drop following the announcement.
Meanwhile, the traditional stock markets saw most stocks bounce back from opening losses following the rate hike. However, long-term sentiment points to future pain as markets hoped for leniency from the central bank amid the turmoil the day before.
Bitcoin is still faithful
The flagship cryptocurrency saw a small sell-off in the hour following the ECB rate hike after briefly breaching $25,000 and trading at $24,752.58 at press time.
BTC has shown no signs of contagion from the turmoil in the traditional financial markets over the past couple of weeks and has continued its steady testing of resistance levels above $25,000 after a fiery rally of more than 15% over the past seven days.
The top 10 cryptocurrencies by market capitalization experienced broadly similar price movements and were overall unaffected by the ECB’s rate hike.
However, only BTC, Ethereum and BNB have posted significant weekly gains. BNB was up over 8% in the last 24 hours.
TradFi in the sand?
European banking shares saw their worst day on March 15 since February 24, 2022, after Credit Suisse’s troubles sent the bank’s shares down 24%. The overall sector decreased by 7%.
Shares have since recovered after the Swiss central bank announced a $54 billion loan to the ailing lender on March 16 – hours before the rate hike.
However, it is unclear whether the Swiss National Bank’s lifeline will be enough for the lender to survive long-term, with some analysts expecting it to need another loan within the year.
Meanwhile, across the pond, US regulators are still dealing with the collapse of two banks in the space of a week – reviving the original debate about why we need Bitcoin.
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