Bitcoin and S&P 500 tumble despite rate hike meeting expectations

Yesterday, the Federal Reserve raised interest rates by 75 basis points, and Fed Chair Jerome Powell predicted another 125 basis point increase before the end of the year. This, resultantly, raises the benchmark rate to 4.4% by the end of the year, well above the 3.8% predicted in June. The Fed also hinted that rate cuts would be considered only in 2024.

These decisions led to an aggressive sell off, causing Bitcoin to drop by 10%, breaking its previous support of \(18,200. Stocks also took a 3% hit that essentially wiped \)1 trillion dollars from the S&P’s market cap. Moreover, DXY broke its 20-year all-time high yesterday by printing \(110.86, and is firmly holding onto its newly claimed range of \)111.

Even though BTC and the crypto market has bounced since, given that DXY and BTC move inversely, we might see more weakness in BTC price. For now, bulls will want to keep an eye on $17,700 as the next significant support.

Top altcoin gainers and losers

Gainers

Algorand ALGO (+14.03%) Celsius CEL (+11.09%) Ripple XRP (+9.17%)

Losers

EOS (-6.40%) Ethereum ETH (-5.64%) Lido stETH (-5.54%)

BTC Technical Analysis

As highlighted yesterday, BTC is still rangebound, with the upper limit now lowered from \(20,500 to \)19,300. Using Bollinger bands we can see \(18,500 is a short term local support and bulls need to protect this level for a few days till sellers exhaust out. The 200 EMA still stands at \)20,500 but we can see some bullish divergence forming between yesterday and early September prices on the daily BTC chart.

ETH Technical Analysis

Ethereum bounced from \(1,220 yesterday and liquidated high leverage shorts in a relief rally to \)1,311. This move, however, is already in retracement with Ethereum falling back to \(1,280 hours before the S&P 500 opened. If it fails to hold this line our scenario from yesterday will play out and we will see Ethereum at \)1,060 - \(920. Futures data indicates a build-up of longs between \)1,400 and $1,500, and a sharp downward move could result in cascading liquidations.

Coin360 Daily Digest

Apart from interest rate and macro economic policy speculations, here’s a rundown of the major crypto market news from today.

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Disclaimer: None of the information here constitutes financial advice and market participants are advised to conduct their own research since cryptocurrencies are speculative assets with considerable risks.