Bitcoin Cash, Stacks, Neo, Solana, and Stellar prices retreated on Wednesday as the US dollar index (DXY) continued to rally. The main catalyst for the sell-off was the surge in energy prices, particularly Brent crude oil, which rose to over $90 per barrel. This increase in oil prices has led to speculation that the Federal Reserve may maintain its hawkish tone and hike interest rates further.
Some economists believe that the Fed may raise rates by another 0.25% this month, potentially pushing rates to 5.75%. However, others argue that the Fed will hold rates steady as officials wait for more information on inflation. Christopher Waller, a Federal Reserve official, has expressed support for keeping rates unchanged.
The expectation of further rate hikes has prompted investors to seek the safety of the US dollar, resulting in a surge in the DXY index to its highest level in over five months. Cryptocurrencies, including Bitcoin and Ethereum, often have an inverse relationship with the US dollar, meaning they tend to retreat when the DXY index is soaring.
Despite positive news from Visa, which announced its expansion of the USDC stablecoin to Solana’s ecosystem, Solana and Stellar prices still retreated. Solana is known for its fast speeds and low transaction costs, making it an attractive technology for Visa’s processing needs. This news also impacted Stellar since USDC is built on its technology.
Looking ahead, the outlook for Bitcoin and other altcoins appears relatively bearish, as there are no major catalysts in the near term. The eventual acceptance of a Bitcoin exchange-traded fund (ETF) by the US Securities and Exchange Commission (SEC) could serve as a potential catalyst. This outcome seems more likely after GreyScale won a major lawsuit last week.
In conclusion, Bitcoin Cash, Stacks, Neo, Solana, and Stellar prices retreated as the DXY index surged due to rising energy prices and expectations of further rate hikes by the Federal Reserve. The outlook for cryptocurrencies remains uncertain, with the eventual acceptance of a Bitcoin ETF potentially serving as a catalyst for future price movements.
Disclaimer: The information provided in this article is solely for informational purposes and should not be considered as investment advice. Always do your own research before making any investment decisions.