- The FOMC minutes suggest that the Fed will raise interest rates by 75 basis points in September.
- Although other factors and data also play a role, this generally does not reflect a positive expectation.
- As the details of the last session became known, Bitcoin and Ethereum both declined.
The FOMC minutes of the last meeting of the Fed’s Open Market Committee suggest that the next increase is due at the end of September. The next interest rate step is likely to be at 75 basis points, at least that is the expectation resulting from the publication.
More importantly, however, the Minutes did not reveal any nasty surprises, which leaves the situation as a whole unchanged. Both the stock and crypto markets are likely to jump on interest rate decisions and inflation data. It may well be sufficient that the expectations are not met in order to stimulate the markets. For example, inflation in the US was a proud 8.5% in July, but because this fell short of the expected data in the result, prices nevertheless rose.
However, the market is currently lacking momentum and this is noticeable by the fact that both Ethereum and Bitcoin have declined as leading cryptocurrencies. The only positive aspect is that the bloodletting has been low so far. At the time of writing, Bitcoin stands at $23,447 and Ethereum at $1,859.
Narratives have little effect
The fact that BlackRock, as the largest asset manager in the world, offers its institutional clients direct access to Bitcoin, has been received with mixed feelings in the crypto scene. The idea that the establishment of global high finance should be a boon for Bitcoin, of all things, struck many ills.
On the other hand, it is of little use that Bitcoin is an ultimate scarce commodity if no capital flows into the market. The price also depends on demand. So if the customers of BlackRock ever feel the need to invest one or the other billion in BTC, that would certainly be positive. What is more remarkable in this connection is the fact that this circumstance is not able to heat the minds. The same message would certainly have ignited a cruise missile last year.
The merge also seems to have lost its attractiveness, although the result is more impressive for Ethereum than for Bitcoin, because the Ether price has more than doubled since the low point in June.
Clear support areas and resistances
It would not be surprising if the crypto market moves sideways in the coming weeks. If Bitcoin and Ethereum break out to the north or south, then the chart analysis shows clear support areas and resistances.
For Bitcoin, the magic limit is $25,000. Although this area was touched, but in the higher timeframes, such as the daily chart, no trading day closed above this mark. If the bears should continue to push the price, it would be important if a support forms at the latest at $ 21,500. Otherwise, Bitcoin threatens to test the area below $ 20,000 and, if necessary, reach a new annual low.
For Ethereum, the picture also looks relatively clear. A retest in the area around $ 1,700 would be quite justifiable if the price catches up afterwards and continues to rise. However, if the Ether price closes below it in the higher timeframes, then it would not be surprising if the new price target is around 1250 US dollars. The next really significant support is waiting there.
However, if Ethereum can pick up speed again, a breakout above $ 2,000 would be extremely bullish and a price target of between $ 2,400 and $ 2,500 would be possible.
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