Bitcoin, Ethereum Move Sideways, Dogecoin Falls Amid Jerome Powell's Hawkish Tone On Rate Cuts: Analyst Says Dip Temporary Before BTC Highs
Leading cryptocurrencies felt the pinch on Wednesday after Federal Reserve Chair Jerome Powell said “no decision” has been made on a September rate cut.
What Happened: Bitcoin dipped below $116,000 late afternoon but recouped the gains overnight. Ethereum extended its gains overnight following the afternoon pullback, even as trading volume cooled off.
A White House advisory group formed under President Donald Trump released a cryptocurrency blueprint urging federal agencies to clarify rules concerning digital assets.
Meanwhile, cryptocurrency liquidations hit $432 million in the last 24 hours, with Ethereum alone accounting for $101 million.
Interestingly, Bitcoin's rise to $120,000 could liquidate $430 million worth of BTC short positions on Binance.
Bitcoin's open interest rose by 1.23% in the last 24 hours. When the spot price is sideways and open interest is increasing, it typically precedes a breakout in either direction.
Despite the weakness, "greed" sentiment persisted in the market, according to the Crypto Fear & Greed Index.
Top Gainers (24 Hours)
Cryptocurrency
Gains +/-
Price (Recorded at 9:30 p.m. ET)
Ethena (ENA)
+10.29%
$0.6258
Conflux (CFX)
+8.22%
$0.2215
Curve DAO Token (CRV)
+8.18%
$1.04
The global cryptocurrency market capitalization stood at $3.86 trillion, contracting 0.24% in the last 24 hours.
Major stock averages closed lower on Wednesday. The Dow Jones Industrial Average slid 171.71 points, or 0.38%, to close at 44,461.28. The S&P 500 dipped 0.12% to end at 6,362.90. The tech-heavy Nasdaq Composite was the silver lining, gaining 0.15% to end at 21,129.67.
The Federal Reserve held interest rates steady at 4.25%-4.50%, as expected, followed by hawkish comments from Powell.
Powell said that "no decisions" have been made about a rate cut in September, pouring cold water on investors' hopes. The odds of a 25 basis point cut fell to 43% from 63% the day before, according to the CME FedWatch tool.
See More: Best Cryptocurrency Scanners
Analyst Notes: Widely followed cryptocurrency analyst and trader Michaël van de Poppe suggested that the cryptocurrency market dip following no change in rate cuts is temporary.
"I think it’s a great chance to accumulate. Could be that we fall deeper, but not for long. August/September new ATHs," the analyst predicted.
Another cryptocurrency-focused trader, Tom Tucker, spotted Bitcoin forming a bullish pennant on its daily chart.
A bullish pennant is a continuation chart pattern, indicating resumption of an uptrend after a pause or consolidation period.
"With the Crypto Fear & Greed Index still in the greed zone at 63, and Bollinger Bands tightening, a breakout could be near. Target on breakout? $143,550," Tucker projected.
Photo Courtesy: Yalcin Sonat On Shutterstock.com
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Posted-In: Cryptocurrency
