Leading cryptocurrencies are portraying their trading valuations in red after the latest FOMC minute meetings reveal. The minutes suggest a hike in interest rates, putting pressure on investors to sell back their crypto holdings. Bitcoin has been treading carefully, holding its position at $51,000; however, BTC has noted a dip of 0.77% at press time.
Ethereum and Ripple are also holding their ground steady but have documented a price fallback of 2.33% and 2.38% in the last 24 hours, respectively.
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Could Bitcoin fall below $50,000?
The renewed interest in the cryptocurrency market, fueled by the ongoing ETF hype, has been driving the overall momentum of the crypto market.
However, the potential fear of a sell-off triggered by the FOMC minutes has cautioned investors to some extent.
Judging by the technical indicators, Bitcoin’s relative strength index has already noted a sell signal. Bitcoin’s moving average convergence divergence indicator also shows signs of distress, dipping below the signal line.
To steady the momentum in the long run, Bitcoin will need the support of bulls to sustain its long-term growth.
Similarly, Ethereum and Ripple are also responding to the sell signal as projected by their RSI indicators. Traders are anticipating a potential drop in ETH prices by 5% as its MACD histogram shows a slight descent.
At the same time, XRP is also experiencing overhead pressure. The price of XRP could dip nearly 7% as its RSI indicator projects a possible sell signal.
However, BTC, ETH, and XRP can also be poised to achieve new all time highs given the market sustains such stark pressure.
#Bitcoin reaching a new ATH in this cycle will be quicker than the previous cycles, however, correction is needed to reach such a milestone
Historically, when $BTC breached the 70 RSI level in a M timeframe a new ATH is in view but right now, it is 1.73pts away from reaching it… pic.twitter.com/4uhoJCxJer
— Mikybull
Crypto (@MikybullCrypto) February 21, 2024
Impact of FOMC Minutes on the Crypto Market
The FOMC minutes play a crucial role in changing an investor’s narrative towards the market in general. In response to cryptocurrency, a change in interest rates projected by the FOMC can potentially sway an investor’s mindset, compelling him to sell his holdings.
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This is done to protect an investor against the dipping signs of inflation, which could ultimately lead him to bear significant losses.
Higher interest rates often steal capital from the crypto markets, primarily due to their high volatility. At the same time, investors would want to invest money in robust, high-yielding assets like gold to keep their profits steady in the long run.
