[Bitcoin Now] Falls to 51 Million KRW Range... Continued Fed Impact

Continued Tightening Fear
Dunamu's Fear and Greed Index Rises to Fear Stage... Possible Investor Sentiment Squeeze

On the 7th, as the cryptocurrency prices continue to decline, the Bitcoin price is displayed on the price status board at Bithumb Gangnam Customer Center in Seoul. Photo by Mun Honam munonam@

[Asia Economy Reporter Gong Byung-sun] The leading cryptocurrency Bitcoin has fallen to the 51 million KRW range. This is interpreted as the cryptocurrency market being shaken by the U.S. Federal Reserve's (Fed) announcement of tightening.

According to the domestic cryptocurrency exchange Upbit, as of 1:19 PM on the 7th, Bitcoin recorded 51.3 million KRW, down 3.64% from the previous day. This is also the lowest price since September 30 of last year. After rising to 58.3 million KRW on the 2nd, Bitcoin has dropped by 12%.

Other altcoins are also sluggish. Based on Upbit, Power Ledger showed the largest decline of 10.22%. This was followed by Basic Attention Token (-10.21%), Elrond (-9.96%), Arweave (-9.52%), and Algorand (-9.04%). Power Ledger attracted investors' attention with a sharp 79.19% surge on the 2nd but has been declining continuously since then.

Upbit operator Dunamu's Fear & Greed Index has risen to the fear stage. As of this day, Dunamu's Fear & Greed Index stands at 34.38, remaining in the fear stage. The fear stage indicates a situation where price volatility increases and investors' sentiment tightens, forming between 20 and 40. Since Bitcoin began to plunge sharply on the 5th, Dunamu's Fear & Greed Index entered the fear stage. Below 20 is the 'extreme fear' stage, where many investors may sell at once.

The Fed's announcement of tightening appears to have negatively impacted the cryptocurrency market. On the 5th (local time), the Fed released the minutes of the Federal Open Market Committee (FOMC) meeting held last month. According to the minutes, FOMC members made several hawkish remarks. 'Hawkish' refers to a monetary policy stance that prefers tightening when the economy overheats.

Most members predicted that conditions for raising interest rates would be met quickly. Additionally, some members argued that if asset purchase tapering ends, interest rate hikes should be implemented immediately. Last month, the Fed announced it would move the tapering end date forward from June to March.

Furthermore, the Fed also considered quantitative tightening to withdraw liquidity. Quantitative tightening is a stronger tightening policy than tapering, where bonds held are not reinvested upon maturity, thus not supplying liquidity to the market.

This content was produced with the assistance of AI translation services.