"Hmm is it likely that the price of crypto will drop significantly?"
Cryptocurrency markets may have to brace themselves for a fall as US manufacturing production data came in higher than expected on Thursday.
Reportedly, the ISM Manufacturing PMI index for January 2024 reached 49.1 points beating the Wall Street forecast of 47.2 points and although it was less than the 50 reading needed to indicate an improvement in the sector, the value was the highest since October 2022.
So here it can be seen that the strong rebound in the ISM manufacturing index not only proves that the decline in the sector is fading but also allows the Federal Reserve (Fed) to wait longer before reducing interest rates.
In addition to deciding to maintain interest rates, the Fed also indicated that economic activity has grown at a strong rate in the US and the main point in the Fed's report is that inflation has decreased over the past year, but remains high.
Crypto is always dependent on investor sentiment, so interest rate decisions by the Fed have always been an important metric used by market participants to measure investments as lower interest rates often make the securities less attractive.
Currently, financial markets around the world expect interest rate cuts to happen soon, but economic data now shows that economic conditions are not good enough to allow for significant rate cuts.
As of this writing, BTC price has surged by 2.67% to $43,108 in the last 24 hours with a market cap of $845 billion and a further 7.99% increase over the last week.
