Bitcoin (BTC) made a big dip after the US central bank’s interest rate decision, but made a strong recovery again yesterday afternoon. Bitcoin shot from $27,500 to $28,850, up nearly 5%. Bitcoin then fluctuated overnight between $28,250 and $28,450, but has now fallen slightly below and ends up at $28,225 on Binance and €26,175 on Bitvavo.
This means that the bitcoin price is up 1.3% today. Trading volume fell 27% in the last 24 hours. The total market capitalization is $545 billion and the dominance is 46.2%. The Fear & Greed Index comes out at 61 (Greed).
Bitcoin Fear and Greed Index is 61. Greed
Current price: $28,335 pic.twitter.com/8jUO0wOixE— Bitcoin Fear and Greed Index (@BitcoinFear) March 24, 2023
Bitcoin price recovers from FOMC dip
The drop following the Federal Open Market Committee (FOMC) interest rate decision was one of the strongest post-FOMC reactions in the past year, analyst firm Kaiko reports.
#Bitcoin fell by $2k in just 2 hours yesterday, definitely one of the most market-moving FOMC announcements in the past year. pic.twitter.com/j8zG6EmYxX
— Kaiko (@KaikoData) March 23, 2023
The decision may not have been what the markets had hoped for, but the end seems to be in sight for further rate hikes. However, yesterday the Bank of England also raised interest rates by 0.25% to $4.25%.
Many markets showed a small recovery yesterday, but European stock markets are already opening in the red today. Despite the monetary policy of central banks, the ongoing banking crisis and the attack by regulators on the crypto market, bitcoin is still holding up remarkably strong.
1/3
Was yesterday the last rate hike of the cycle?
The blue line in the chart below shows the expected terminal rate derived from fed funds futures contracts. The orange line shows the mid-point of the actual target federal funds range, now 4.875%.
For the first time this… pic.twitter.com/6E7itrkSMm
— Jim Bianco biancoresearch.eth (@biancoresearch) March 23, 2023
Bitcoin liquidity to lowest point in 10 months
However, due to the banking problems, there is very little liquidity in the market. For bitcoin, liquidity has even fallen to the lowest level in 10 months, reports Kaiko researcher Conor Ryder. This may be due to the closure of the few crypto banks in the United States.
The liquidity situation in crypto is worsening after the banking fears this month 📉
I dived into several liquidity metrics to give an update on all things crypto liquidity🧵
First, $BTC liquidity has dropped to 10 month lows as market makers lose access to USD payment rails👇 pic.twitter.com/RwcBEJ8y5Z
— Conor Ryder (@ConorRyder) March 23, 2023
Bitcoin spot volume reaches all-time high
It seems that private investors in particular are currently leading the way. Last week, spot volume reached the highest level ever in bitcoin history, Byzantine General reports. The spot volume will also reach the highest monthly level ever.
This is also going to be the highest spot volume month ever, and the month isn’t even over yet. pic.twitter.com/3ShXW3DXh6
— Byzantine General (@ByzGeneral) March 24, 2023
As a result, the recent rally was mainly driven by the spot market and not by the derivatives market. However, it looks like the whales and institutional investors are still staying away.
Bitcoin mining difficulty up as Green Peace takes action
Green Peace again lashes out at Bitcoin’s energy consumption, but that is accompanied by a lot of ignorance. The crypto community seems to find the new artwork mostly tough, and that probably wasn’t the point of the action.
Some climate activists think #Bitcoin is just fake internet money they can safely ignore.
The truth? Bitcoin is causing dangerous amounts of real-world pollution from its ravenous consumption of fossil fuels, all due to its outdated code.
The solution? #ChangeTheCode pic.twitter.com/7wa7BMCzV5
— Greenpeace USA (@greenpeaceusa) March 23, 2023
Ironically, the so-called bitcoin mining difficulty was adjusted last night. It increased by a whopping 7.5% to a new all-time high of 46.84 T at an average hash rate of 335 exahashes per second.
The rising hash rate shows that the network consumes even more energy. The increasing difficulty shows that the pressure on miners is increasing. This was very high last year, but has recently decreased due to the rising share price. That’s a good thing, because many miners were already forced to empty their reserves.
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