Cryptonews Blockchain News

Crypto Prices Are Crashing Because of What’s Coming on Wednesday

Bitcoin

Ethereum Federal Reserve

Author

Ruholamin Haqshanas

Author

Ruholamin Haqshanas

About Author

Ruholamin Haqshanas is a contributing crypto writer for CryptoNews. He is a crypto and finance journalist with over four years of experience. Ruholamin has been featured in several high-profile crypto...

Author Profile

Last updated:

October 23, 2023

Why Trust Cryptonews

Cryptonews has covered the cryptocurrency industry topics since 2017, aiming to provide informative insights to our readers. Our journalists and analysts have extensive experience in market analysis and blockchain technologies. We strive to maintain high editorial standards, focusing on factual accuracy and balanced reporting across all areas - from cryptocurrencies and blockchain projects to industry events, products, and technological developments. Our ongoing presence in the industry reflects our commitment to delivering relevant information in the evolving world of digital assets. Read more about Cryptonews

The week is off with the bulk of the cryptocurrency market trading in the red, which is largely attributed to the upcoming rate hike announcement from the US Federal Reserve Bank.

According to a report by Yahoo Finance, Fed officials are expected to deliver a third-straight 75-basis-point increase to their benchmark policy rate during the two-day meeting which ends Wednesday.

Investors across both the crypto market and traditional equities markets are bracing for the impact of the announcement. This is especially as higher-than-expected inflation figures in August (an 8.3% YOY increase in consumer price index -C PI) sparked more pessimism about the Fed rate hike.

Data from CryptoRank, a cryptocurrency price data aggregator, shows that all of the top 10 cryptocurrencies by market cap have dropped between six to 11% in price in the last 24 hours. Market leader Bitcoin (BTC) fell around 8% to be trading at around $18,400.

Similarly, second largest crypto Ethereum (ETH) fell 11% on the day to currently be trading at around $1,290. The current ETH price is also a 26.1% drawdown from the one-month high price of about $1,800 it reached in the week preceding the Merge.

Meanwhile, BNB, XRP, ADA, SOL, and DOGE have fallen about 7%, 11%, 10%, 8%, and 8.5% respectively on the day per data at the time of writing.

Analysts still hopeful for Bitcoin

Despite the turbulent market action, analysts have not given up the notion that Bitcoin is forming a bottom. DrProfitCrypto, a pseudonymous crypto market analyst, told his over 35,000 Twitter followers that the pioneer cryptocurrency has entered a “bottom phase” in which he is expecting the price to remain stable between $18,000 and $25,000 till March 2023.

However, the analyst adds the caveat that this price bottom would only hold if the Fed announces the already priced-in 75bps rate hike. An announcement of a 100bps hike will see the market shed more blood.

https://www.twitter.com/DrProfitCrypto/status/1571452624892993538?s=20&t=oowzuRkeLsqPwpua7J-jdQ

TradingTank and Chase Crypto also posted similar FOMC meeting predictions.

A 100bps rate hike announcement only has a 20% probability of occurring according to data from the CME Group’s FedWatch Tool. Regardless, data collated by TIME still shows that the crypto market has a history of also nosediving in the aftermath of the Fed rate hike announcements.

The Fed rate hikes in March, May, and June all saw at least a 10% drop in the price of BTC. The drop following the Fed’s July meeting was less severe, the TIME report noted.