Gate.io Blog Market Trend 13/6 - 19/6 ｜FED’s biggest hike since 1994, Bitcoin under 20k, Altcoins obliterated

Market Trend 13/6 - 19/6 ｜FED’s biggest hike since 1994, Bitcoin under 20k, Altcoins obliterated

20 June 10:30

If there was any doubt that crypto, and all financial markets as a whole, were in a bear market then let it be put to rest now. While we provided context over the previous week that this is not the moment to make any big decisions, the alarms have officially sounded following the Federal Reserve’s recent rate hike - the biggest in 28 years, signalling that the US will most likely enter a recession in the upcoming months, while some experts believe it won’t be made clear until mid-2023.

Regardless, the results of pessimistic investments have started flooding all markets - with crypto suffering the hardest fall, due to its size compared to giants like stocks, real estate and commodities.

The upcoming week is only for the brave - and potentially insane - to enter, as there is virtually no sign of recovery anywhere in the market. As Bitcoin and Ethereum continue to hit lower lows, altcoins take the largest hits of the ecosystem and are being tarnished from their previous market values.

FED raises interest rates by 75 basis points

Federal Reserve Chair Jerome Powell announces rate hikes. Source: CNBC

This week, the Federal Reserve announced the biggest rate hike since 1994 in order to combat inflation - 75 basis points, with Chair Jerome Powell stating that such hikes will most likely be present in July as well.

There is a clear discrepancy in discourse between the Federal Reserve and US Treasury back in 2020 and 2021 compared to now. Over the past two years, the agencies kept insisting that inflation was under control and its people should not fear the long-term consequences of the Covid-19 pandemic. Now, as we approach the second half of 2022, the message is clear: they were wrong.

Given the Reserve’s recent history of making predictions, one can only expect the worst; with this record-high rate hike in decades, it is very unlikely that the economy will recover anytime soon.

Bitcoin now trades under 20k

Bitcoin results of the week, highlighting its lowest point. Source: CoinGecko

Bitcoin spent the largest part of the last few weeks trying to hold on to its previous 28-32k levels that we had been seeing lately, after another large correction brought the asset down from 38-41k’s previous support.

With expected rate hikes from the Federal Reserve and the global economy feeling the pressure of a potential recession coming, risk assets are always the first to go - and that means Bitcoin. Monday all the way through to Sunday, the biggest cryptocurrency faced a massive plunge from 28k to its lowest 17k so far, now with a brief bounce back to 19k. The asset received plenty of bullish pressure from Tuesday to Saturday to keep itself over the monumental 20k support, but it was not enough.

Bitcoin is now at its lowest level since December 2020, so what’s the expectation? Anything can happen, of course, but there is nothing indicating that the asset may edge higher unless it’s a notorious “dead cat bounce.” From where we stand, another week of lower-lows is extremely likely.

Altcoins obliterated

Some of the biggest drops in altcoins over the past 7 days. Source: CoinGecko

It was earlier stated that risk assets are the first to go in a crisis, therefore Bitcoin suffered major losses compared to traditional assets. The same principle applies within crypto; although BTC faced major downturns, altcoins’ suffering was much greater.

Major projects like Moonbeam, DeFiChain, Maple and Chain were amongst the biggest losses of the past 7 days in crypto; all projects with proven utility and a supportive community.

So what does that show? If things get uglier for Bitcoin, they’ll get even uglier for altcoins. Bitcoin dropped significantly this week and yet still maintained its percentual market dominance, same for Ethereum. If there should be great care with Bitcoin over the next following weeks as it all points to even more drops, that care must be doubled for altcoins - they’re always the first ones to go.

Author: Gate.io Researcher: Victor Bastos
* This article represents only the views of the researcher and does not constitute any investment suggestions.
*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all other cases, legal action will be taken due to copyright infringement.

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Market Trend 13/6 - 19/6 ｜FED’s biggest hike since 1994, Bitcoin under 20k, Altcoins obliterated

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