Upbit Gripped by 'Inflation Fear'... Bitcoin Also Collapsed Below 92 Million Won on Fed's 'Belated Freeze'

Upbit's 1 trillion won trading volume also collapsed... Bitcoin also fell below 92 million won on Fed's 'belated freeze'

▲ Upbit Coin Market, Investment Sentiment Rapidly Cooling/AI Generated Image ©

The US Federal Reserve's (Fed) decision to freeze the benchmark interest rate, instead of bringing relief, fueled concerns about delayed inflation response, leading to a sharp decline in US stocks, bonds, and cryptocurrencies. At Upbit, the largest virtual asset exchange in Korea, Bitcoin fell below 92 million won during intraday trading, and the 24-hour trading volume also dropped below 1 trillion won, clearly revealing a contraction in investment sentiment.

According to Upbit at 7:15 AM on July 30, Bitcoin (BTC) was trading at 91,851,000 won, down 0.89% from the previous day. The intraday high was recorded at 92,996,000 won and the low at 91,000,000 won, indicating that after breaking the 92 million won mark, it partially recovered its losses. XRP (Ripple) fell 0.32% to 1,544 won, Ethereum (ETH) dropped 1.76% to 2,736,000 won, and Solana (SOL) decreased 1.31% to 105,700 won. Dogecoin (DOGE) and Ondo Finance (ONDO) also declined by 1.94% and 1.53%, respectively.

The overall decline in the Upbit market was more pronounced in altcoins. The Upbit Composite Index fell 1.07% to 9,499.11, and the Upbit Altcoin Index dropped 1.60% to 2,420.82. Upbit10 and Upbit30 also decreased by 1.18% and 1.20% respectively, while the Bitcoin Group fell 0.87% and the Ethereum Group declined 1.76%. As altcoins saw larger declines than major cryptocurrencies, risk-averse sentiment appears to be rapidly spreading to the lower end of the market.

However, even in the bear market, some assets saw short-term buying interest. RE rose 8.84%, KAITO 6.19%, and EUL 5.24%, showing a trend contrary to the general market. On a weekly basis, KAITO recorded the highest increase at 28.97%, followed by SOON at 25.00%, PRL at 21.37%, ZAMA at 19.40%, and PROSPER at 16.20%. However, SOON plummeted 26.80% and LA 18.15% on the day, indicating that profit-taking and high volatility were simultaneously observed even in selected surging assets.

Trading enthusiasm also cooled down again. At the same time, according to Upbit Datalab, the 24-hour trading volume decreased by 0.18% to 989.474 billion won, falling below 1 trillion won. The daily trading volume also amounted to only 945.442 billion won. Tether (USDT) accounted for the largest share of the 24-hour trading volume at 20.22%, followed by Bitcoin at 9.71%, XRP at 8.25%, Ethereum at 6.90%, and EUL at 6.47%. The fact that one-fifth of the total trading volume was concentrated in Tether indicates that investors are prioritizing the management of standby funds rather than actively buying altcoins.

The direct cause of the bear market is the increased distrust in policy following the Fed's interest rate freeze. The Federal Open Market Committee (FOMC) froze the benchmark interest rate at 3.50-3.75%, but members Beth Hammack, Neel Kashkari, and Lorie Logan voted against it, advocating for a 0.25 percentage point increase. Fed Chairman Kevin Warsh emphasized his commitment to achieving the 2% inflation target, but the bond market focused on the action of freezing rates rather than his remarks. The Dow Jones Industrial Average plummeted 2.19%, the S&P 500 Index 1.52%, and the Nasdaq Composite Index 1.74%, with the Nasdaq 100 Index falling more than 11% from its June peak, entering a correction phase.

The sell-off in US Treasury bonds and the surge in international oil prices also pressured risk assets. The US 30-year Treasury yield rose to 5.21%, reaching its highest level since July 2007, and the 10-year yield touched 4.7%. With the resumption of armed clashes between the US and Iran, Brent crude surged 7.9% to $90.74 per barrel, and West Texas Intermediate (WTI) rose 6.6% to close at $84.46. If high oil prices push inflation up again, the likelihood of prolonged Fed tightening increases, which could place an additional burden on cryptocurrencies that do not pay interest.

In the short term, Bitcoin's ability to defend the 91-92 million won range is expected to determine the direction of the Upbit market. If it fails to quickly recover 92 million won and even breaks below the intraday low of 91 million won, the decline and volatility of altcoins could expand. Conversely, a recovery of 93 million won and a return of trading volume above 1 trillion won are necessary to expect a rebound in buying sentiment. Since the Fed's freeze was not perceived as a positive catalyst, a cautious bearish trend is likely to continue for the time being, influenced by US Treasury yields, international oil prices, and the geopolitical situation in the Middle East.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted solely for informational purposes.*