Bitcoin and altcoins rose ahead of the Fed’s rate hike, suggesting that traders viewed the 0.75% rate hike as a “price” event.
The Federal Reserve raised interest rates by 75 basis points on September 21, and Fed Chairman Jerome Powell predicted a further 125 basis points before the end of the year. If this happens, the base rate will rise to 4.4% by the end of the year, well above the June estimate of 3.8%. The Fed also hinted that it only expects a rate cut to be considered in 2024.
Expectations for a higher rate pushed 2-year Treasuries to 4.1%, the highest level since 2007. This could attract many investors looking for safety in this uncertain macro environment. Higher rates are likely to reduce the attractiveness of risky assets such as equities and cryptocurrencies and could delay the start of a new uptrend.
Daily indicators of the cryptocurrency market. Source: Coin360
Despite facing several headwinds in the near future, this has not stopped MicroStrategy from buying more coins. After the last 301 bitcoin purchases, the company’s stash has increased to 130,000 bitcoins. This shows that MicroStrategy and its chairman Michael Saylor remain optimistic about the long-term prospects for Bitcoin.
Bitcoin and altcoins are trying to stabilize after the Fed announcement. Can they start to heal? Let’s examine the charts of the top 10 cryptocurrencies to find out.
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Bitcoin fell below immediate support at $18,626 on September 19, but the candle’s long tail shows strong buying at lower levels. The bulls held this level again on September 21, which is a positive sign.
BTC/USDT daily chart. Source: Trading View
Buyers will need to push the price above the 20-week exponential moving average (EMA) ($20,100) to indicate that sellers may be losing control. The BTC/USDT pair could then move up to the 50-day Simple Moving Average (SMA) of $21,363. This level can act as tough resistance again, but if the bulls break through this hurdle, the pair could rise to $25,211.
If the price drops from the 20-day EMA, the bears will try to push the pair back below the strong support zone between $18,626 and $17,622. If they succeed, the pair could witness panic selling and drop to $14,000.
For the past few days, it has been falling in a downward channel. The price bounced off the channel’s support line on September 19, indicating dip buying.
Daily ETH/USDT chart. Source: Trading View
The bulls are trying to start a rise above $1,400. If this level is exceeded, ETH/USDT could rise to the 20-day EMA ($1513). This level can be a real test for the bulls in the short term as a break above this level could open the way for a possible rally towards the channel resistance line.
If the price deviates from the 20-day EMA down, this would mean that sentiment remains negative and traders are selling on the upside. This may push the price towards the channel support line. If this support does not continue, the pair could drop to $1,000.
BNB is correcting as part of a downward channel model. A strong rebound from $258 is a positive sign as it indicates that demand is at a lower level.
BNB/USDT daily chart. Source: Trading View
The bulls will try to push the price above the 20-day EMA ($278) and challenge the channel resistance line. The 50-day SMA ($293) is just above the channel; therefore, the bears are expected to aggressively defend the level.
If the price deviates from the resistance line, the BNB/USDT pair could drop to $258. If this support is breached, the pair may slide towards the channel’s support line.
The bulls will have to push and hold the price above the channel to raise the possibility of a bounce to the hard upper resistance at $338.
Ripple (XRP) broke the upper resistance at $0.41 to close on September 20, but the bulls were unable to build on that strength. The bears returned the price to the range on September 21st.
Daily XRP/USDT chart. Source: Trading View
If the bulls do not give up too much on the current level, a break above $0.41 would increase the odds. The 20-day EMA ($0.36) has begun to rise and the RSI is in the positive zone, indicating the path of least resistance to growth. If the price breaks and rises above $0.41, XRP/USDT could hit $0.46