(Kitco News) – The highly anticipated 75 bps interest rate hike announcement from Federal Reserve Chair Powell came and went on Wednesday without much effect on the wider crypto market, suggesting that it had already been priced in.
“This decision was as expected and so the market has already braced for it,” said Damian Scavo, CEO and Founder of Streetbeat. “Given the latest rise in interest rates, we expect to see inflation cool down in November and see better news for the market as soon as December, despite ongoing stock market volatility during the crisis in Ukraine.”
Volatility in both the crypto and traditional markets briefly spiked directly following Powell’s announcement. But the price action has since calmed down as the day fell in line with what the majority of analysts were expecting.
Data from TradingView shows that Bitcoin (BTC) whipsawed in response to the interest rate hike, trading as high as $20,811 and hitting a low of $20,210, with bears now attempting to push for further declines.
BTC/USD 4-hour chart. Source: TradingView
The resumption of sideways trading for Bitcoin on the daily chart “is not bearish – yet,” according to Kitco senior technical analyst Jim Wyckoff, who noted that “A fledgling price uptrend is still in place on the daily bar chart.”
According to Wyckoff, “Bulls still have the overall near-term technical advantage but need to show fresh power soon to keep it.”
What comes next
A positive take on what comes next was provided by cryptocurrency analyst Michaël van de Poppe, who posted the following tweet noting the possibility of a short-term correction to $20,000 before a resumption of the uptrend.
Still the view I have on #Bitcoin.
A sweep of the lows at $20K would trigger continuation on the markets, and such a swipe is regular during FOMC, after which we continue towards $22.5K.
Dips buying might be done tonight. pic.twitter.com/ZOaYRibKIw
— Michaël van de Poppe (@CryptoMichNL) November 2, 2022
But not all are optimistic about prices grinding higher from here, including pseudonymous crypto analyst il Capo of Crypto, who provided the following price targets for BTC and ETH before the market reverses and establishes new lows.
Plan for November:
-Pump to 21000-21500 for the last phase of the distribution. ETH to 1700s.
-Altcoins having the last scam pumps as well. People calling for altseason.
-Start of the reversal to new lows.
-Mega nuke after midterm elections. BTC to 14k and ETH to 700-800.GL!
— il Capo Of Crypto (@CryptoCapo_) November 2, 2022
Prices start to head south
As the dust began to settle following the fourth consecutive 75 bps interest rate hike, both the crypto and traditional markets began trending down.
The S&P, Dow and Nasdaq all briefly traded in the green around the time of the rate hike announcement, but reversed course as the day progressed to close down 2.5%, 1.55% and 3.36%, respectively.
The altcoin market, likewise, took a turn for the worse in the afternoon resulting in the vast majority of tokens seeing red on the day.
Daily cryptocurrency market performance. Source: Coin360
Notable exceptions to the overall weakness include Mask Network (MASK), Render Token (RNDR) and ConstitutionDAO (PEOPLE), which are 66%, 25.48% and 23.33%, respectively, at the time of writing.
The overall cryptocurrency market cap now stands at $1.02 trillion, and Bitcoin’s dominance rate is 38.8%.
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
