Bitcoin and Ethereum prices have recently experienced retracements following the Bank of England’s decision to raise interest rates for the 13th consecutive time. The increase of 50 basis points to 5% was larger than anticipated and comes in response to the UK’s annual inflation rate remaining at 8.7%. The central bank also revealed that further rate hikes are on the horizon in an effort to reduce inflation to their 2% target.
Bank of England Governor Andrew Bailey stated that lowering inflation is their “absolute priority.” The Monetary Policy Committee, comprising nine members, voted 7-2 in favor of the interest rate increase. This marks the highest level in 15 years and the most significant change since February.
In the United States, Federal Reserve Chair Jerome Powell also indicated that interest rate pauses are temporary and further hikes are likely if the US economy maintains its current course. The market currently anticipates two US rate hikes by the end of the year.
As central banks worldwide continue to raise interest rates, treasury yields are also increasing, putting additional pressure on Bitcoin prices. The US Dollar Index, which had fallen below 102, is now rising towards 102.50 after the Bank of England’s rate hikes.
Bitcoin’s price recently reached a high of $30,737, nearly matching the April high of $31,000. However, the cryptocurrency’s value fell below $30,000 following the Bank of England’s surprise rate hike. Despite the downturn, a positive sentiment for Bitcoin to reach $35,000 still persists among traders, buoyed by whale accumulation.
Analyst Michael van de Poppe predicts a consolidation in the $29k-$30k range for Bitcoin, with an optimal entry point at $28,500 after a correction. This price action is likely since Bitcoin faces strong resistance at $31,000.
Meanwhile, Ethereum’s price has also seen a decline, falling to $1,900. The digital asset’s 24-hour low and high are $1,815 and $1,932, respectively. Furthermore, trading volume for Ethereum has increased over the past day, indicating growing interest among traders.
Ultimately, it is essential to conduct thorough market research before investing in cryptocurrencies, as the presented content may reflect the personal opinions of the author and is subject to market conditions. The author and publication hold no responsibility for personal financial losses stemming from investment decisions.
Source: Coingape
