Crypto prices dip as the Fed shows no intention of halting interest rate hikes
(Kitco News) - Cryptocurrency prices trended down on Wednesday ahead of the release of the most recent Federal Open Market Committee (FOMC) meeting minutes, where the Fed reaffirmed its dedication to doing what needs to be done to get inflation back to its 2% target.
Following the release, the price of Bitcoin (BTC) whipsawed between a low of $23,360 and $23,640 as investors attempted to discern how the crypto market would be affected moving forward in an environment of additional interest rate hikes.
BTC/USD 4-hour chart. Source: TradingView
Overall, the market appears to be responding negatively to the strong possibility of additional interest rate hikes, as history has shown that previous periods of quantitative tightening and rising rates have coincided with a downturn for the crypto market.
A good range for accumulation
From a macro perspective, today’s release of the FOMC minutes has done little to change the overall structure that the market has been trading in for the past couple of months.
As noted by the pseudonymous cryptocurrency analyst “Big Smokey” in a recent substack post, “Despite multiple attempts to flip the $24,000 level to support and a few recent breakouts above it, BTC essentially still trades in the same $18,000 to $23,000 range, just at the top of it now. From a higher timeframe point-of-view, BTC price also continues to make lower highs.”
BTC/USDT 2-day chart. Source: TradingView
Based on these observations along with the fact that multiple key on-chain metrics for Bitcoin’s valuation have been at multi-year lows, Big Smokey suggests that there is “a strong case for accumulating BTC in its current range.”
Everyone should hold BTC
Despite the general weakness shown by BTC and the crypto market over the past 9 months, Morgan Creek CEO mark Yusho still believes that Bitcoin is the one asset that “every investor must have in their portfolio.”
Yusho made the comments during a recent appearance on CNBC and took his bullishness one step further, proclaiming that the crypto winter ended in June and the market is now entering a crypto spring, which will be a “volatile period with an upward bias.”
Following the crypto spring will be a crypto summer, “where retail traders will flood back in and buy at higher prices,” Yusho said.
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A sea of red in the altcoin market
The altcoin market likewise trended lower on Wednesday as macroeconomic concerns overshadowed any positive effect brought on by the hype surrounding the Ethereum Merge.
Daily cryptocurrency market performance. Source: Coin360
The few notable exceptions on the day include a 57.85% spike in the price of ABBC Coin (ABBC), followed by a 15% increase for Flux (FLUX) and a 12.5% gain for EOS (EOS).
The overall cryptocurrency market cap now stands at $1.117 trillion, and Bitcoin’s dominance rate is 39.9%.