The Fed Frightens Investors as Crypto Market Drops

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The Fed Frightens Investors as Crypto Market Drops. The movement of the crypto market on Wednesday (21/9/2022) was increasingly worrying. The price of crypto assets has fallen, making investors even more worried about the announcement of the Fed’s benchmark interest rate hike.

Tokocrypto trader Afid Sugiono said the main factor that made the crypto market fall deeper today was investors anticipating the announcement of an increase in the US benchmark interest rate by the Fed.

“Investors have launched a bearish attitude after believing the Fed will raise its benchmark interest rate by 75 basis points at the meeting of the Federal Open Market Committee (FOMC) which ends tonight,” Afid said in a daily market analysis received by, Wednesday, September 21, 2022.

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Especially if the increase is above the predicted figure, there is usually a negative impact on the market. Price movements will occur significantly immediately after the Fed’s decision is announced.

However, terror in the crypto market may turn into a bull run, if the Fed raises its benchmark interest rate by 50 basis points. Moreover, the crypto market actually has a glimmer of hope to escape Septembear’s trap in 2022.

“On the other hand, investors should also be wary of the Fed Chair Jerome Powell’s comments in the press conference after the FOMC meeting. The new comments could be about the Fed’s stance that it will increase its benchmark interest rate until the end of the year in order to reduce inflation,” explained Afid.

Disclaimer: Every investment decision is in the hands of the reader. Study and analyze before buying and selling Crypto. is not responsible for profits and losses arising from investment decisions.

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Investors worry that this will send the US economy into a recession instead of a soft landing, as the Fed had promised. Recession due to higher interest rates eventually leads to higher commodity prices and weaker purchasing power, investors will stay away from the crypto market.

The Fed Frightens Investors as Crypto Market Drops. There is a possibility that this increase in the benchmark interest rate could make Bitcoin (BTC) go down again. According to technical analysis, currently the strongest support area for BTC is in the USD 16,000 area or equivalent to IDR 240.1 million to USD 14,000. The temporary downside target is at the level of USD 15,856, if the breakdown is successful it will continue to fall to the range of USD 14,000.

“Meanwhile, Ethereum will also likely go down. The closest downside target is the price level of USD 1,280. If it succeeds in breaking down the support point and forming a new lower low (LL), then the next support will be at the level of USD 1,187,” concluded Afid.

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Bitcoin fell to its lowest level in three months on Monday, September 19, 2022 as investors moved away from riskier assets amid expectations of higher interest rates.

The world’s largest cryptocurrency fell about 5 percent to hit an intraday low of around $18,276, its lowest level since June 19, according to Coin Metrics. However, on Tuesday (20/9/2022) morning trading, Bitcoin seemed to strengthen and was above USD 19,000.

Bitcoin fell 3.77 percent so far in September 2022 and was the second straight negative month after falling 15 percent in August.

Ethereum also fell 5 percent to $1,281 each on Monday, hitting its lowest level since July 15. Ethereum has fallen 13.8 percent this month, on track to record its worst month since June.

Risk assets are under great pressure as the Federal Reserve is expected to stick to its aggressive tightening schedule.

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The central bank is widely expected to approve this week a third straight 0.75 percentage point rate hike that would take the benchmark rate to a range of 3 percent to 3.25 percent.

Bitcoin chief revenue officer and co-founder Chris Kline said the decline was exacerbated by the sell-off.

“Retail investors have a long-term view of bitcoin while institutional investors treat digital assets like technology stocks and adopt a short-term mentality that contributes to the sell-off we are seeing,” Kline explained.

The Fed Frightens Investors as Crypto Market Drops. According to senior analyst at blockchain analytics firm CryptoQuant, Julio Moreno, institutional “whales”, miners, or large numbers of bitcoin holders, usually with more than 1,000 bitcoins in wallets, have been hedged macros and sold their coins since June.

“That is evidenced by the increasing number of coins being sent to exchanges and dumped on retail investors, who believe bitcoin is finding its bottom at this level, even though there is actually a step further,” Moreno concluded.

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