Market Wrap: Bitcoin Little Affected by Fed Interest Rate Hike
The U.S. Federal Reserve surprised almost no one with even a passing interest in monetary policy by raising rates by a hefty 75 basis points for the fourth consecutive time.
Bitcoin shrugged. Ether fell.
The largest cryptocurrency by market value was recently trading at roughly $20,200, down 1.3% over the past 24 hours after rising earlier in the day. As CoinDesk analyst Glenn Williams wrote earlier in the day, the crypto winter has given bullish investors the opportunity to accumulate at a favorable cost basis. Larger crypto investors are continuing to explore this opportunity.
"Whether asset managers are picking the right price point to go long will play out over the next 12 months, but they appear to be ahead of the curve," Williams wrote.
Ether, the second-largest crypto in market value, was recently changing hands at about $1,510, down more than 4% following the Fed’s decision to continue its months-long, monetary hawkishness.
The CoinDesk Market Index declined about 2%. Even dogecoin (DOGE), the biggest gainer among altcoins over the past week, plunged almost 10%. CRO was among the exceptions, recently rising more than 6.7%.
Meanwhile, major equity markets plunged following the Fed’s announcement, with the tech-heavy Nasdaq off 3.3% and the S&P 500 and Dow Jones Industrial Average (DJIA) off 2.5% and 1.5%, respectively. Investors remain concerned about the central bank’s strategy to combat rising prices, and the prospect of a harsh recession. Safe haven gold sank 0.7%.
● CoinDesk Market Index (CMI): 1,001.44 −2.4%
● Bitcoin (BTC): $20,146 −1.6%
● Ether (ETH): $1,509 −4.2%
● S&P 500 daily close: 3,759.69 −2.5%
● Gold: $1,638 per troy ounce −0.4%
● Ten-year Treasury yield daily close: 4.06% +0.0
Bitcoin, ether and gold prices are taken at approximately 4pm New York time. Bitcoin is the CoinDesk Bitcoin Price Index (XBX); Ether is the CoinDesk Ether Price Index (ETX); Gold is the COMEX spot price. Information about CoinDesk Indices can be found at coindesk.com/indices.
BTC Markets Entering a New Phase in Potential Accumulation Season
By Glenn Williams Jr
Bitcoin and ether’s significant decline in recent months is providing bullish investors the opportunity to accumulate at a favorable cost basis. Larger crypto investors are continuing to explore this opportunity.
Bitcoin has been trading in a narrow range for nearly five months, with support at about $19,000 a good portion of the time. Ether has dipped as low as $1,000 but has mostly hovered around $1,300 over the same period. Now, both have stepped up a rung, with support above $20,000, and $1,500, respectively.
The increases come amid a fourth consecutive 75 basis point interest rate hike by the Federal Open Market Committee (FOMC) in the Federal Reserve's fierce battle to stem inflation without throwing the U.S. economy into a steep recession. Crypto markets have largely responded to the central bank’s monetary gyrations and other macroeconomic events, usually rising with encouraging news and dipping when investors are more pessimistic. Such reactions are normal in asset markets of all stripes.
Read the full technical take by CoinDesk analyst Glenn Williams Jr.
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Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive and standardized classification system for digital assets. The CoinDesk Market Index (CMI) is a broad-based index designed to measure the market capitalization weighted performance of the digital asset market subject to minimum trading and exchange eligibility requirements.