Major cryptocurrencies traded mixed Wednesday evening in response to the U.S. central bank’s decision to raise the interest rate by 25 basis points (bps).
Cryptocurrency
Gains +/-
Price (Recorded 9:30 p.m. EDT)
Bitcoin (CRYPTO: BTC)
+0.79%
$29,373
Ethereum (CRYPTO: ETH)
+1%
$1873
Dogecoin (CRYPTO: DOGE)
-3.69%
$0.077
What Happened: Despite the rate hike, investors remain hopeful that the Federal Reserve will eventually cease its series of interest rate increases, fueling anticipation among market participants.
Following the rate hike, Fed Chair Jerome Powell once again expressed the bank’s willingness to consider increasing interest rates.
Bitcoin is considerably lower than its peak earlier this month at $31,800. On Monday, BTC briefly fell below the $29,000 mark.
Top Gainer (24 Hour)
Cryptocurrency
Gains +/-
Price (Recorded 9:30 p.m. EDT)
XDC
+16.12%
$0.06242
Synthetix
+9.31%
$2.88
Stellar
+8.36%
$0.1558
Currently, the global crypto market capitalization stands at $1.18 trillion, a 0.93% increase in the last day.
The US stock market experienced a decline on Wednesday following a Federal Reserve rate hike and major corporate earnings. The S&P 500 ended at 4,566.75, showing a 0.02% decline, while the Nasdaq Composite dropped 0.12% to close at 14,127.28.
During its meeting, the Federal Reserve raised rates to their highest level in more than 22 years by implementing a quarter-point hike. However, Treasury yields decreased after Powell suggested the possibility of the central bank pausing again.
“I would say it’s certainly possible that we will raise funds again at the September meeting if the data warranted. And I would also say it’s possible that we would choose to hold steady and we’re going to be making careful assessments, as I said, meeting by meeting,” said Powell at a press conference following the decision.
The next rate decision by the Fed will occur on September 20.
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Analyst Notes: “Bitcoin caught a modest bid after the Fed decision triggered a modest risk-on rally. The Fed is most likely done raising rates and that should provide some relief to the interest rate sensitive sectors in the cryptoverse,” wrote OANDA Senior Market Analyst Edward Moya.
Crypto Analyst Michael Van de Poppe expects that there will be no more rate hikes in the near future. However, he is concerned about the FED’s projection that there will not be a recession, as it is highly likely that one will occur. Furthermore, Van de Poppe anticipates a poor GDP report tomorrow, which could potentially cause a dip in the price of Bitcoin before it resumes its upward trend.
Most likely no more rate hikes.
However, the FED is not projecting a recession is a concern. Most likely one will come.
Have a terrible GDP tomorrow and sweep the lows on #Bitcoin before we continue the party up.
Buy the dip season. pic.twitter.com/KdhnNOz6kC
— Michaël van de Poppe (@CryptoMichNL) July 26, 2023
Crypto analyst Benjamin Cowen is alerting traders to a potential risk with Bitcoin, highlighting historical patterns that suggest the king crypto may be prone to corrections post-halving.
According to the analyst, BTC often surpasses its bull market support band in the first half of pre-halving years, only to swiftly drop below it in the third quarter.
To support his argument, Cowen points to notable instances of BTC following this trend in 2011, 2015, and 2019.
“It’s just that normally, in the pre-halving years we will see Bitcoin do well for a good portion of it, but then sometime around the third quarter, we see it fail to hold the bull market support band,” he added.
Produced in association with Benzinga
