The crypto market plunged further on Thursday following the European Central Bank and Bank of England lifting interest rates.

ECB, Bank of England Lifts Interest Rates

Just like other countries’ apex banks globally including the US Federal Reserve, the European Central Bank and Bank of England continue their battle against the rise in the cost of goods and services draining citizens’ pockets.

The Bank of England and the European Central Bank announced on Thursday, December 16 that the interest rate would be raised by 0.5% points in their bid to continue their fight against inflation.

According to a statement by the European Central Bank, the benchmark interest rate would be increased to 2% from the initial 1.5%, the highest since 2009.

The ECB added that it expects to raise rates even further because inflation is forecasted to remain above the norm for far too long.

“The Governing Council decided to raise interest rates today, and expects to raise them significantly further, because inflation remains far too high and is projected to stay above the target for too long,” a statement by the ECB read.

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Crypto Market Reaction

As the US Federal Reserve raised the interest rate on Wednesday, December 14, the crypto market plunged further, the same reaction is seen in the stock market.

However, on Thursday, following a similar move by the European Central Bank and the Bank of England, the cryptocurrency market continues its downtrend as the market cap drops further.

With continuous rate hike announcements, cryptocurrency has failed to recoup earlier losses and are seen to be struggling under pressure with poor fundamentals.

Also, according to the market sentiment analyzer, Bitcoin Fear and Greed Index, the indicator is slowly inching closer towards the “Extreme Fear” mark, which denotes a state of brewing panic in the market.

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