Bitcoin and Ether tumble ahead of Federal Reserve meeting

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(Edited by James Rubin)

Hello. Here’s what’s going on this morning:

Market moves: Bitcoin slumped as investor nervousness increased over the Fed’s next move to fight inflation.

Technician’s point of view: A BTC outage could hurt the medium-term trend despite oversold signals.

Prices

Bitcoin (BTC): $ 46,963 -6.7%

Ether (ETH): $ 3,800 -8.75%

Markets

S&P 500: $ 4,668 -0.9%

Dow Jones Industrial Average: $ 35,650 -0.8%

Nasdaq: $ 15,413 -1.3%

Gold: $ 1,786 0.2%

The market is moving

Bitcoin fell more than 7% on Monday, the largest daily percentage drop since December 4, as stocks in the United States also fell ahead of a Federal Reserve monetary policy decision later this week.

The Fed is expected to make its decision on Wednesday on stepping up to reduce its bond purchases and signaling that it will start raising interest rates next year.

While a low interest rate environment has caused the stock and crypto markets to soar this year, rising rates and the quicker end of easy money policies could, however, tip the market in a bearish direction.

Ether also fell sharply on Monday, despite the # 2 cryptocurrency by market cap previously proven to be more resistant to macro headwinds than bitcoin. At the time of publication, the ether had fallen by about 10% at some point in the past 24 hours.

The ether to bitcoin price chart, an indicator of bitcoin’s dominance over ether, has declined accordingly, after hitting its highest level since 2018.

Ether / bitcoin ratio (TradingView)

According to crypto trading data firm Kaiko, the ether / bitcoin ratio chart has historically served as an indicator of investor sentiment.

“When the ratio rises, it suggests investors are rotating funds to ethereum and altcoin [alternative cryptocurrencies] markets, and vice versa, ”Kaiko wrote in her newsletter Monday. “Since the end of October, the ratio has been on a steady upward trend and recently surpassed its highest level since 2018.”

The technician’s point of view

Bitcoin drops, risk of testing $ 40,000 support

The story continues

The daily Bitcoin price chart shows support / resistance with the oversold RSI in the second panel. (Damanick Dantes / CoinDesk, TradingView)

Bitcoin (BTC) remains under pressure as buyers haven’t crossed $ 50,000 in the past week.

The cryptocurrency has fallen by around 6% in the past 24 hours and is trading around $ 47,300 at the time of publication.

Immediate support is seen at the 200-day moving average (around $ 46,700), which is also the low of a one-week price range. Given the negative momentum signals, however, bitcoin is at risk of falling below support which could damage the medium-term trend.

For now, the Relative Strength Index (RSI) is the most oversold since May, which could encourage short-term buying. Still, the rise appears to be limited to the resistance level of $ 50,000.

In the event of a failure, the next level of support is estimated to be around $ 40,000, which could stabilize the decline.

Important events

8:30 a.m. HGT / SGT (12:30 p.m. UTC): National Australia Bank Trade Terms / Business Confidence (November)

12:30 p.m. HGT / SGT (4:30 a.m. UTC): Industrial production in Japan (Oct. YoY / MoM)

6 p.m. HGT / SGT (10 a.m. UTC): Eurostat industrial production (Oct. AA / MoM)

7 p.m. HGT / SGT (11 a.m. UTC): European Blockchain Convention

CoinDesk TV

In case you missed it, here are the most recent episodes of “First Mover” on CoinDesk TV:

Blockchain Unicorn Watch, Lesson From BadgerDAO’s $ 120 Million Hack & More

The ‘First Mover’ hosts spoke to Jonathan Manzi, CEO of Beyond Protocol, a blockchain project focused on trust and security, after BadgerDAO recently revealed details of his $ 120 million hack. First Mover covered the crypto market information from Eaglebrook Advisors’ research director Joe Orsini. Plus, what blockchain unicorns have emerged in North America this year? Blockchain Coinvestors managing partner Matthew Le Merle provided details of his list.

Latest titles

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Tezos’ ‘Exchange Traded Cryptocurrency’ Launch on German Exchange: Altcoin Institutional Products on the Rise as Investors Look Beyond Bitcoin and Ethereum.

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Longer readings

Chatex users ask US Treasury to release Crypto Frozen by Sanctions: Retail clients have been swept away by actions to punish crypto firm accused of money laundering.

Explaining today’s crypto: what is a Bitcoin Futures ETF?

Other Voices: The Rise of Cryptocurrency Ponzi Schemes: Scammers are making big bucks on people who want to participate in the latest digital gold rush but don’t understand how the technology works. (Atlantic)

Said and heard

“But crypto users around the world may soon face similar difficulties as US regulators, with their global reach, attempt to curb the illegal use of cryptocurrency. The prospects for these users to get their money back. money is unclear, even though they are innocent of any wrongdoing. (CoinDesk – Chatex users) … “Some people make the mistake of assuming that regulators are more independent and impartial than they are. in reality. If this year – even last week – has shown us anything, it should be an awareness that priorities and focus can change, sometimes dramatically, with a change in administration and senior management. direction. The multi-regulator system reduces the shock associated with this risk. (CoinDesk – Matthew Homer) … “So you thought all the guys who bought the dip before just had to luck ? No, it’s never that easy. (Changpeng Zhao)

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