The price of Bitcoin has dipped below $25k for the first time in three months after the Fed halted the run of interest rate hikes in the FOMC meeting yesterday.
It was widely expected that the Federal Reserves will not increase the interest rates this time due to the CPI (Consumer Price Index) data which indicated a reduced rate of inflation.
Despite the expected outcome playing out, the market experienced a downward turn. Total market capitalisation is down from $1.38tn to $1.02tn – a 3.97% decline in the last 24 hours.
Ether, the second-largest cryptocurrency by market capitalisation, experienced the most significant decline compared to other top 10 cryptocurrencies. It dropped by 6.45% in the past 24 hours from around $1,734 to $1,633 at the time of writing.
The announcement by Fed chair Jerome Powell did little good to alts who have struggled recently following lawsuits and ‘securities’ tags accorded to them by the SEC. Cardano (ADA), Polygon (MATIC) and Solana (SOL) who were recently well on their path to recovery have now recorded double-digit percentage losses in the last seven days.
Although many traders expected lots of volatility ahead of the FOMC meeting, it was unclear which direction the market will head after the pause of interest rate hike. Speaking to Coin News yesterday before the meeting, Terence Ribaudo, Web3 market analyst and CEO of Launchpad.xyz, predicted the downward spiral.
“FOMC outlook is flat, with US swaps pricing in no change to interest rates. If this happens, the tone of the meeting will be the most prevalent variable to observe. Likely outcome now is some short-term volatility and then a continued downward trend. Important levels to watch on $BTC are $26,700 and $25,500,” he said.
Olszewicz still bullish
Head of research at Valkyrie Investments Joshua Olszewicz who also predicted a pause in interest rates hike predicts that the bulls will eventually take over. His analysis is based on a previous Bitcoin setup last year when an inverted head and shoulder (which is referred to as a bullish reversal pattern) was formed.
After breaking above the pattern’s neckline, Olszewicz expects a retest of the neckline (throwback). If the throwback resolves positively and the price breaks above the neckline, he expects that there could be a trade opportunity with a target price of $37,000.
“Positive resolution of the throwback measures as potentially a pivot-to-pivot trade setup from $25,000 to $37,000. Extended price activity below the 200DMA would suggest a chart pattern failure and further range bound activity between $15,000 to $25,000,” he explained in his weekly market review.