The biggest cryptocurrencies have continued to plummet, as the price of Bitcoin (BTC) fell to $20,600354. The increased weakening of Bitcoin has been devastating for cryptocurrencies like Dogecoin (DOGE), Cardano (ADA), XRP, and others.
Early on Tuesday, cryptocurrency prices fell precipitously as a result of higher-than-expected consumer price index (CPI) statistics.
The market anticipates that the US Federal Reserve will increase its commitment to tightening financial conditions.
BTC and other cryptos take a hit as CPI numbers are out
The Federal Reserve is likely to hike its key interest rate by at least three-quarters of a percentage point next week, with some speculating that it may need to increase it even more after consumer price inflation data came in hotter than anticipated.
Nomura Securities analysts now predict that the Fed will announce a 100-basis point increase. The business claimed that “the August CPI report… implies a succession of upside inflation risks may be materializing.”
By the end of the year, the Fed will likely announce two further rate increases of 50 basis points to combat inflation, according to experts.
The probability of the big rate rises is now estimated at 28% in Fed funds futures. The market seems to be assuming that the central bank would maintain a more gradual pace of monetary tightening rather than conduct a really significant rate rise.
The U.S. central bank increased interest rates by 75 basis points in July, which provided some comfort to BTC and other cryptos. The forthcoming merge event has been overshadowed by recent inflation figures since market sentiment is largely pessimistic.
BTC took a major hit along with other major altcoins. Bitcoin which was recently showing signs of slow recovery erased it when it plummeted to $20,371 at the time of writing. ETH, ADA, SOL, DOGE, and other major coins also followed suit with single and double-digit losses.