Crypto Market Dips as US Federal Reserve Hikes Interest Rates

Bitcoin (BTC) is once again under pressure as the leading cryptocurrency briefly sank to a four-week low of $22,408 on Thursday morning before climbing back to prices of around $22,715 by press time.[0] Yesterday, Bitcoin experienced a decrease in market capitalization of $10 billion, reducing the total market cap to $437.9 billion from Wednesday’s figure of $448 billion.[1] Bitcoin, the world’s largest cryptocurrency, holds a 39.4% share of the market, with Ethereum in second place with 17.7%.[0]

On February 17, 2023, after two days of bullish trading, the crypto market experienced a decline in its gains.[2] Major alt coins such as Bitcoin (BTC), Dogecoin (DOGE), Ethereum (ETH), and Solana (SOL) all experienced losses in trading.[3] On Thursday morning, the majority of the biggest digital currencies were in the red, with Litecoin having the most significant fall, dropping by 1.82% to $97.01.[4]

The dip in the market came after reports of the U.S. Securities and Exchange Commission (SEC) investigating popular cryptocurrency exchange Kraken for alleged securities laws violations.[5] Binance also denied a report that it was considering delisting all US-based cryptocurrencies.[6]

The market is responding to news that the US Federal Reserve is expected to raise interest rates for the first time in over a decade. CME Group analysts are anticipating that the Federal Reserve will raise interest rates by 25 basis points at their meeting in the upcoming month with an estimated probability of more than 90%. Interest rates in the United States are now set between 4.5% and 4.75%, the highest level seen in 15 years. Federal officials have suggested that these rates may be increased up to 5% in order to bring inflation back to within the Federal Reserve’s desired range.[7]

The trading activity in US bond and currency markets indicate an increased expectation of the US Federal Reserve to implement tighter policies.[8] CME’s Fed Watch Tool shows that there is a better than 50% chance of the Federal Reserve increasing interest rates by at least 75 basis points (to 5.25-5.50% or higher), as suggested by 30-Day Fed Funds futures market data. This represents an increase from the estimated likelihood of 6.0% from one month ago.[8]

0. “Crypto Market Bleeds, With Bitcoin Falling Below $22k” CoinGape, 10 Feb. 2023,

1. “Going ‘Parabolic’—Analyst Who Called 2020 Crypto Boom Issues Huge Bitcoin Price Prediction After $100 Billion Ethereum, BNB, XRP, Cardano, Dogecoin, Polygon And Solana Rally” Forbes, 16 Feb. 2023,

2. “Latest Crypto Prices: Bitcoin Loses 3.78%, Ethereum Dips 2.21%, Doge Slips 4.73%” Outlook India, 17 Feb. 2023,–news-262882

3. “Crypto Depletes As Binance, Avalanche Dip; Big Eyes Coin Now Trades With BTC, BNB, Others” NewsWatch, 12 Feb. 2023,

4. “Bitcoin’s value jumps above $22,000 as regulators dial down on crackdown” Hindustan Times, 15 Feb. 2023,

5. “Bitcoin Sinks Below $23000 as Crypto Regulation Scrutiny Intensifies” OODA Loop, 9 Feb. 2023,

6. “BTC/USD Technical Analysis” ForexLive, 10 Feb. 2023,

7. “Markets: Bitcoin slips back below US$24,000; equities slide” Forkast News, 17 Feb. 2023,

8. “Bitcoin Volatility Expectations Remain Subdued Despite Hot US Inflation Figures – What This Means For the BTC Price” Cryptonews, 15 Feb. 2023,