Bitcoin Slips to 3-Week Low as Market Sees Federal Reserve Lifting Rates to 5.65%

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Bitcoin remains under pressure as traders lift their forecasts for the so-called terminal rate to 5.65%. reports godbole17.

The leading cryptocurrency by market value fell to $21,871 during Asian trading hours, a three-week low,show. Ether, the second-largest cryptocurrency, nearly tested Tuesday's low of $1,535.

In response to Powell's hawkish comments, traders of the Fed funds futures lifted their forecasts for the peak or terminal rate to 5.65% from around 5.47% early this week and 4.9% a month ago. In other words, traders now expect continued tightening over the coming months, with the central bank raising rates by at least 100 basis points before calling it a day.

As seen in the feature image, currently, October futures represent the terminal rate, implying a peak borrowing cost of 5.65%. A month ago, June futures represented the peak rate of 4.9%.

 

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