Bitcoin under pressure, U.S. stocks lose momentum
The cryptocurrency market continues to show weakness amid the tightening of monetary policy by the U.S. Federal Reserve. Bitcoin, the leading digital currency, has dropped to the $66,000 level, which is the lowest in several months.
This is the fifth consecutive week of decline for Bitcoin. Such a prolonged negative dynamic raises concerns that the coin may face a deeper correction if it fails to hold above the psychologically important $66,000 level.
The pressure on cryptocurrencies is largely due to market expectations regarding further actions by the Fed. The minutes of the latest meeting of the Federal Open Market Committee indicate that the regulator is seriously considering the possibility of raising interest rates in the near future to fight high inflation.
Such signals are also negatively impacting U.S. stock indices, which are also losing some of their recently gained momentum. Investors fear that the tightening of monetary policy could undermine the economic recovery.
Expert assessment
The current market situation shows that investors are becoming increasingly nervous about the expected Fed rate hikes. This is affecting both cryptocurrencies and traditional financial assets. However, despite short-term volatility, in the long run, Bitcoin and other cryptocurrencies should benefit from the transition to a new monetary policy regime. The main driving force for this will be the growing demand from institutional investors who are looking for protection against inflation.