As long as Bitcoin and Ethereum hold support, cryptocurrency markets will continue to move sideways this week. Despite a rise in trading volume over the last 24 hours, Bitcoin and Ethereum are still around $20k and $1,500, respectively, much like yesterday. Let’s examine recent cryptocurrency news that is influencing pricing.
Key Notes:
- Despite a massive increase in trading volume, Bitcoin and Ethereum are still above the support level.
- During their most recent meeting, the Federal Reserve decided to increase rates by another 0.75% later this month, which would give markets further negative influence.
- Due to the influx of investors seeking a haven against inflation, cryptocurrency markets are beginning to depeg from traditional stocks.
- Before choosing what to do next, Bitcoin and Ethereum will probably test support over the coming days.
General Market Update
Bitcoin’s values dropped somewhat today following the Federal Reserve meeting on November 2nd, even though it is still over the $20k mark. The Federal Reserve authorized an additional 0.75-point increase, according to the official FOMC statement. The official statement reads as follows:
“The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 3-3/4 to 4 percent.”
The current Federal funds rate is 3.08% as of October 26th, 2022. As a result, given that current rates are about 1% below the objective, a significant interest rate increase may occur before the year is over.
The NASDAQ closed down 2.61%, the S&P 500 was down 2.5%, and the Dow Jones is down 1.55% this Wednesday, all in reaction to the FED’s raised objective.
Despite the generally negative stock market headlines, the Bitcoin and Ethereum markets saw a significant boost in trading volume. The 24-hour trading volume of BTCUSD has increased by 43%, while ETHUSD has risen by 72%.
More traders are turning to cryptocurrency markets as a possible insurance policy against the global economy, and inflation has probably caused a surge in trading volume. Cryptocurrencies are beginning to depeg from traditional markets, despite Bitcoin’s recent year-long trading in lockstep with stocks.
The current level of the cryptocurrency fear and greed index is a comparatively high 30 points, still indicating fear but significantly higher than the extreme fear level of 20 points from the previous month.
Bitcoin is currently trading at $20,353, down 2% from the previous week, while Ethereum is up 0.06% from the last week and is still trading above $1,500. Before the market starts preparing for its next move next week, sideways trading for Bitcoin and Ethereum is expected to continue.
Remember this in light of recent interest rate announcements from the Fed, before the end of the week, Bitcoin and Ether may test support again.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any projects.
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