Bitcoin stops the escalation and drills the US$27,000 and Ethereum falls to US$1,581. The cryptocurrency market lost up to 5% led by Toncoin, followed by Solana up to 3%.
This adjustment has occurred after the last decision of monetary politics of the Federal Reserve (Fed). The US central bank half met its expectations: interest rates did not rise at this meeting, but the Fed warned that it is prepared for one more increase in the remainder of the year if necessary.
The Fed maintained the level of rates, but foresees more increases
The members of the Comitted Federal Open Market (FOMC) significantly raised their growth forecasts, reduced their estimate of the unemployment rate and, above all, maintained their forecast for inflation core, which justifies a additional increase this 2023 and only a drop of 50 basis points in 2024.
The pause ‘hawkish’ of the Fed was endorsed by the statements of President Jerome Powell, who assured that “it is more likely that it will be appropriate to raise the rates “We want to see really compelling evidence that we have reached the appropriate level, and we are seeing progress and we welcome that. But we need to see more progress before we are willing to come to that conclusion,” he added.
Cryptocurrencies: why is Bitcoin going down?
The digital assets followed in the wake of the equity markets after the Powell’s statements and bitcoin momentarily lost US$26,900. The drop in prices reflects thelittle market conviction in the Fed projections, which has been criticized a lot in recent hours for its latest decision. Likewise, the consensus gives a few points more probability to an increase in the rates of the Fed for the remainder of the year, according to data from CME’s FedWatch tool, but the majority sentiment is for two more pauses: 66.5% in November (-3.6%) and 5.2% in December (- 6%).
“We find it difficult to take today’s announcement with too much optimism. We were surprised that the report emphasized rate cuts slower than previously anticipated,” explained Michael Silberberg, head of investor relations at AltTab Capital.
For his part, Zach Panndl, an economist at Grayscale Research, noted that the Fed “embraced the idea of a soft landing: they see stronger growth and lower unemployment, and they still hope to return to their inflation target“. “The last soft landing came in the mid-1990s, and it turned out to be a great outcome for technology-related assets. Although we cannot assure that there will be a soft landing, that scenario could be positive for BTC and ETH,” she adds.
Technically, César Nuez, technical analyst at Bolsamanía, highlights that the bitcoin gets holdfor the moment, in the vicinity of the important support level which presents at US$24,745. “The abandonment of these prices would make it lose the average of 200 sessions and would make us think about an extension of the falls to the level of US$20,000,” he added.
Source: Ambito
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