Bitcoin Dips to $27K as FED’s Mester Advocates for Continued Tightening

Bitcoin (BTC) faced selling pressure on Wednesday as a prominent Federal Reserve (Fed) official expressed the view that there is currently no compelling reason to pause the tightening of liquidity measures. 

The ongoing tightening measures implemented by the Fed have had an impact on various risk assets, including cryptocurrencies, leading to increased volatility in the market.

FED Executive Sees no compelling Reason to Pause

Loretta Mester, the President of the Federal Reserve Bank of Cleveland, told the Financial Times that she doesn’t see a compelling reason to pause.

“I would see more of a compelling case for bringing the rates up and then holding for a while until you get less uncertain about where the economy is going,” she added.

The Federal Reserve (Fed) has taken steps to address inflation concerns by raising rates by 500 basis points to 5% since March 2022. The recent endorsement of another rate hike and the adoption of a higher-for-longer stance by Mester, a Fed official, follow the release of inflation data that surpassed expectations. This support reinforces the current market sentiment, leading to a more hawkish outlook on interest rates in the United States.

Bitcoin Emerges as a Strong Performer

According to Glassnode, a prominent market data provider, Bitcoin has demonstrated robust performance when compared to other significant commodities. Glassnode highlighted that Bitcoin (BTC) has consistently outperformed other assets, maintaining a 14.5% increase above its February closing price. 

It is important to note, however, that Bitcoin’s performance has been comparatively less strong compared to its peak in the first quarter when it recorded an impressive 72% growth.

The cryptocurrency market has experienced significant volatility in recent times. Bitcoin, in particular, has seen a turbulent ride, reaching a high of $28,044 within the last 24 hours but subsequently dropping to a low of $27,019. As per CoinMarketCap data, BTC is currently being traded at $27,912, reflecting a decrease in value of 2.2% over the past 24 hours.