For the third consecutive time, the Federal Reserve, on September 21, raised interest rates by 75 basis points (0.75 percentage points).
Broader financial markets immediately declined after the announcement as stock prices fell.
🟢Before Powell🟢 versus 🔴After Powell🔴 pic.twitter.com/1QwlBvAPgR
– unusual_whales (@unusual_whales) September 21, 2022
Not to be outdone, the cryptocurrency market has also been impacted. Following the hawkish movement, the price of the main coin, Bitcoin [BTC], immediately slipped below the $19,000 price range, after which it rebounded slightly.
Far from over
According to data from CoinMarketCap, since breaking below $19,000 on Wednesday, September 21, the price per BTC has since risen around 5%. As of press time, the coin traded hands for $19,342.38.
Although seemingly on an upward trajectory, reports from cryptocurrency analytics platform CryotoQuant suggest that more issues await the centerpiece.
According to CryptoQuant, the past few weeks have seen an increase in BTC inflows into exchanges. It is commonplace for a rally in this metric to be an indication of a spike in an asset’s short-term selling pressure. As confirmed by CryptoQuant, this growth in the influx of BTC into exchanges “put selling pressure” on the largest cryptocurrency.
Additionally, the cryptocurrency analytics platform noted that hourly BTC funding rates were significantly negative. According to him, this was another indication that BTC “traders in the derivatives markets were ready to sell short”.
Still trading at the $19,000 price level and suffering an 11% decline in trading volume since the Fed’s announcement on Wednesday, CryptoQuant analyst TariqDabil estimated that for any significant rise in the price of the main coin to be recorded, investors might have to wait. for a little longer. According to Dabil, the main piece “still needs time to recover.”
Before buying the dip
A look at BTC’s Adjusted Exit Profit Ratio (ASOPR) revealed that the current bear cycle (which has lasted over 185 days) has so far been marked by many BTC investors selling at a loss.
According to CryptoQuant analyst IT Tech, ASOPR has worked as resistance in previous bearish cycles. Whenever the price of BTC rose and ASOPR recorded a value of one (suggesting that more investors were selling for profit), this was usually followed by a “pretty strong rejection”.
IT Tech found that ASOPR has worked as a significant resistance for BTC in the current bear market. As a result, a strong rejection could follow if the ASOPR eventually registers a value of one.