Bitcoin, which fell sharply ahead of the Fed’s decision, tested the $20,000 level, while Ethereum traded just above the $1,000 levels.
Cryptocurrencies have nearly collapsed due to the tightening policies implemented around the world to fight inflation, reducing liquidity in global markets. The wave of crypto asset sales has become a symbol of speculative asset breakouts.
As the dollar held steady at a 20-year high on fears that the US Federal Reserve (Fed) will raise interest rates at its meeting ending tomorrow and the US economy will shrink, almost all other currencies depreciated. However, the flight from risky assets such as the stock market and crypto has accelerated.
While Bitcoin, which fell sharply in the morning, tested the $20,000 level, Ethereum traded just above the $1,000 levels.
The rise of risks in the economy and the strengthening of the dollar first affected risky assets. As US stock markets fell 20% from the peak and entered the bear market, the drop in crypto assets, which is considered the riskiest investment tool, was steep.
FED DECISION PENDING
The main item on the global market agenda is how aggressively the Fed will raise interest rates today. With the Fed expected to raise interest rates to between 1.5% and 1.75% by 75 basis points, some investors fear aggressive tightening could lead to a contraction in the economy.
If the Fed raises rates at this pace, it will have made its biggest hike since 1994. Investors began to expect the US interest rate to rise to between 3.75% and 4% by the end of the month. year. The Fed’s decision in the evening will also be decisive for the crypto markets.
THE LATEST SITUATION ON THE CRYPTO MARKET
As the decline since the weekend continued, Bitcoin’s daily decline once again exceeded 8% and the major cryptocurrency hit the critical limit of $20,000.
While Bitcoin was down 8.5% in afternoon trades at $20,000,200, it traded at 20,000,600 after the effect of profit selling. Ethereum was trading at $1070, down 10%.
Solana and Cardano, on the other hand, were trading at $28 and $0.46 respectively, with a decline of 5%. Dogecoin, on the other hand, was trading at $0.050, down 8%.
MARKET PRICE 75 BASIS POINTS INCREASE IN INTEREST
Bestenaz Süllü, Head of Research at Bybit Turkey, shared the following assessments in the daily newsletter in which she rated the crypto markets:
“How many points of interest rate increases have come into today’s decision, inflation in the projection and how many points do members plan to raise interest rates in total until Looking ahead to next year, Powell’s statements on inflation are the main issues to consider.The Fed’s expectation on Monday was that it would raise interest rates by 80 to 50 basis points, but on Tuesday, this picture reversed and an interest rate increase of 75 basis points with an 80% probability began to be priced in.
Today, a rate hike of 100 basis points is assessed as a 5% probability. The sudden and sharp transition between expectations caused very sharp declines in the market. While the S&P 500 has lost value for 4 days in a row, Bitcoin is trying to hold above $20,000. Total cryptocurrency market capitalization decreased to $855 billion.
When we look at the on-chain data, the inflows needed for the market recovery are not being felt, and the increase in the amount of Bitcoin sent to exchanges shows us that there is still time to recover. Technically, the closest support for Bitcoin, which may increase selling pressure by falling behind $20,000,400, is at the $18,000,350 level. The outlook is weak as the selling pressure continues.