The latest announcement by the U.S. Federal Reserve of a 50 basis-point interest rate increase caused the crypto market to crash, wiping out all gains. According to the Fed, it is likely that rates will rise again at the current rate. Today’s announcement comes after inflation fears had caused rates to rise by 75 bps over several months.
Bitcoin (BTC), Price Slumps
After the Federal Reserve announcement, the crypto market and the stock market both crashed dramatically. The price of Bitcoin and Ethereum dropped by more than 2.7% in the last 30 minutes. They currently trade at $17.790 and $1305, respectively.

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The Bitcoin Fear and Greed Index is currently at levels of “fear” and will likely rise to “extreme fear” over the next few days.

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Fear Engulfs Crypto
The market dip and the apparent slowdown in the BTC price rally are causing concern among crypto community members.
Many people expected a relief rally would begin after today’s Fed announcement, but it seems that all hopes have been dashed.

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Everything fell immediately after the Fed announced a rate increase in line with market expectations. So, we must be heading towards zero?
This is the consensus reaction across my timeline. My timeline is never wrong.
— K A L E O (@CryptoKaleo) December 14, 2022
Many prominent analysts believe this crash is more of an “buy the news, trade the rumor” situation and that the market has already bottomed. They believe that Bitcoin will see a rally in relief.

Due to the FTX collapse, the markets plunged from $20K to $15.6K.
We currently trade at $18K, slightly more than the June low.
Although I can understand the bearish thesis, this is actually a sign that #Bitcoin is strong.
— Michael van de Poppe (@CryptoMichNL) December 14, 2022
Many are not convinced that markets behaved in this way because it was normal and will return to normal soon.
Read more: Jerome Powell is Uncertain of the Future Economy

The first reaction is often the wrong one. https://t.co/lvntqLtyOL
— December 14, 2022, The Wolf Of All Streets (@scottmelker).
CoinGlass data shows that the crypto market has contributed $44 million to liquidations in the last 24 hours. Most of this was due to Bitcoin trades.
Read more: Crypto Market crashes after Fed slows down rate hike to 50 BPS
The Fed’s ongoing rate increases are part of a wider effort to curb inflation, calm the economy, and have been pushing prices to their highest level in decades.
Investors react to uncertain economic conditions by investing in cryptocurrency and stock markets. The effects of any new Fed rate increase are still being felt. At this point, Bitcoin’s price direction is unknown for at least the next few days.
Also read: Crypto Expert Predicts Ethereum Price; Time to Buy?

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