The Federal Reserve hinted that it would resume interest rate hikes after halting its tightening cycle, which drove prices in the cryptocurrency market down all over the board.
Stephane Ouellette, CEO of FRNT Financial Inc., an institutional platform specializing in digital assets, noted that the response is extremely consistent with what was observed in other risk assets and is now being perceived by the markets as a slightly more hawkish than anticipated Fed. There are those that predict breakouts around these events, as there are in most markets. He assumes that a few of those short-term trades unwound, causing the sell-off and comeback.
The price of bitcoin, which makes up roughly half of the $1 trillion cryptocurrency market, tested the $25,000 price level as it fell for a third straight day. XRP and Litecoin both had declines of about 8% and 6%, respectively, while Ether experienced a dip of about 4.6%.
Technically, according to Ouellette, Resistance is quite clearly lined up at the $30,000 to $31,000 level, where it continues to threaten a definitive collapse of the 2023 up trend line.
After 15 months of interest rate increases, Fed members took a break on Wednesday, but they gave a hint that they would probably resume tightening at some point in order to reduce inflation.
According to Darius Tabatabai, co-founder of the decentralized exchange Vertex Protocol, the market’s downward pressure looks to be coming from traders who were positioned before today’s FOMC announcement and who bought the rumor and are now selling the actuality.
More specifically, Tabatabai remarked that due to hawkish outlooks, we are seeing liquidations on Vertex and across many other platforms.
