Cryptocurrency market March 9 CHK: Bitcoin lost the 22,000 mark, altcoins were on fire when the Fed made a move to raise interest rates

Bitcoin has fallen to a three-week low as the possibility of a further aggressive rate hike by the Fed put pressure on risk assets.

Cryptocurrency Market

Market data shows that Bitcoin has established a local bottom at $21,580, a 3-week low, with a downside target around $21,300.

Bitcoin failed to sustain the 50-day AMA at $22,319 in daily trading and is also facing another hold at the 200-day EMA at $21,790 on Thursday. This can push the price to the bottom of the channel. Therefore, the market is likely to continue its deep decline, returning to the 100-day EMA at $21.309.

The Relative Strength Index (RSI) is hovering around the 38 region. If selling pressure continues to mount, Bitcoin could even return to the $19,000 support level, representing a 12.6% drop from The current price is $21,746.

On the other hand, if the bulls successfully defend their positions inside the trading channel, Bitcoin is likely to bounce, breaking through the resistance at the 200-day EMA at $21,790, similar to what happened. out on January 14.

If it breaks out of the 200-day EMA, the bulls also need to push the price above the 50-day EMA at $22.319 to resume the upward momentum. A daily candle close above this level will invalidate the bearish thesis.

If this happens, Bitcoin will gain momentum towards the key resistance at $25,242, representing a 16% increase from the current price.

Michaël van de Poppe, founder and CEO of trading firm Eight, summed it up: “Bitcoin does not show strength. In this case, the market might be looking for some more downside momentum to sweep through $21,200 before a rally takes hold. If we want to head to $30,000, then a flip of $23,000 is essential.”

Meanwhile, trader Daan Crypto Trades argues that the volatility is due to strong movements in the Bitcoin futures market.

“The volatility occurred as the large amount of bids on the Binance futures pair combined with a fairly strong increase in open interest.”

With the speech of Jerome Powell, chairman of the US Federal Reserve (Fed), before the US Congress a day earlier had an impact, but the market’s reaction was not so strong. However, the newly released jobs data sent the market mood down.

“The expectation was 197,000, but the actual number was more than 242,000 non-farm jobs created, much higher than expected,” van de Poppe wrote.

“For risk-averse investors, this is not a very good sign, as it is likely that Powell will continue to raise rates more aggressively into 2023.”

Such “hot” employment numbers often skew risk assets because they imply that the Fed will maintain tighter financial conditions for longer.

The altcoin market was also in the red as Bitcoin plunged below $22,000.

SingularityNET (AGIX) led the decline in the top 100 largest projects in the market, when it recorded a loss of 15% on the day. On a 7-day timeframe, this token has lost over 35% of its value. Conflux (CFX), ImmutableX (IMX), Synthetix (SNX) are also projects that show a strong decline of more than 10% on the day. Other altcoins such as Mina (MINA), Neo (NEO), Fantom (FTM), Stacks (STX), Convex Finance (CVX), Curve DAO Token (CRV) … turned down from 8-9%.

Ethereum (ETH), like Bitcoin, is trading with a downtrend and trying to keep the price above a key level.

The market dipped below the 50-day EMA at $1,567 during Wednesday’s trading, turning the $1.546 support into Thursday’s resistance. As buying momentum continues to decline, ETH can drop below the support confluence of the 100-day EMA at $1,509. Below that, ETH could drop to $1,212 before possibly a trend reversal or a return to the $990 support in case the selling pressure becomes too strong.

On the contrary, considering that the RSI has just turned up, many buyers are flocking to the scene and the price could rise. In such a case, ETH would need to break above the 200-day EMA at $1,546 before confronting the 50-day EMA at $1,567. Daily candle closing above this EMA will invalidate the bearish view.

In the event of a strong bounce, ETH price could head towards the $1,727 and even $1,853 resistance levels, representing a 20.55% increase from the current price.

Macro factors

The US stock market ended Wednesday’s session in a mixed state of the indexes, as US Treasury yields continued to rise and economic data seemed to support. Federal Reserve Chairman Jerome Powell’s tough stance during his second testimony before Congress.

Crude oil prices struggled between declines and gains, as investors were half pessimistic about interest rates and half optimistic about the outlook for demand from China.

At a hearing at the House Financial Services Committee, Mr. Powell continued to assert his view that the Fed will raise interest rates higher until inflation really weakens. This stance was made by Mr. Powell during his testimony earlier on Tuesday at the US Senate Banking Committee, triggering a sell-off in Wall Street financial markets the same day.

All three major U.S. stock indexes struggled between slight losses and slight gains for the duration of Wednesday’s trading session. Finally, the S&P 500 and Nasdaq both rose slightly, while the Dow Jones declined slightly.

Uncertainty still overshadowed the market as Mr. Powell once again sent a tough message that interest rates could rise faster than forecast. However, he also stressed that any policy decisions by the Fed will be based on specific economic data.

“Yesterday, the Fed left the door open for more rate hikes, and today, they haven’t closed that door. There are still many uncertainties surrounding when the hike in interest rates will end. Even in a marathon, people know the distance is 26.2 miles, but in this race of interest, no one knows where the finish line is,” said David Carter, CEO of JPMorgan Private Bank. with Reuters news agency.

The economic data released on Wednesday once again showed the solidity of the US economy and did little to assuage investors’ concerns about interest rates. Job vacancies remain high, the private report on new jobs in February just forecasted, and demand for home loans increased despite an upward trend in interest rates.

“If future rate hikes are based on economic data, the economic data are still painting a lackluster picture, so the path of future interest rates is also unclear,” he said. Carter commented.

Strong economic data reinforces the possibility of the Fed raising rates higher for a longer period of time. The market is betting on the possibility of 77.9% of the Fed raising interest rates by 0.5 percentage points at its meeting on March 21-22. At the start of the week, the odds on this rate jump were just 30% – according to CME Group data.

At the close, Dow Jones fell 58.06 points, or 0.18%, to 32,798.4 points. The S&P 500 rose 0.14% to 3,992.01 points. Nasdaq rose 0.4 percent to 11,567 points.

European shares rose slightly, with the Stoxx 600 index inching 0.08%. MSCI index of world stocks fell 0.13%; emerging markets down 1%; the MSCI Asia-Pacific index excluding Japan fell 1.4%; Japan’s Nikkei 225 index rose 0.48%.

Yields on 2-year US Treasuries rose for the third consecutive session; 10-year tenor fell slightly to less than 4%.

Brent crude oil futures in London rose by $0.76/barrel to settle at $82.66/barrel. WTI oil futures in New York fell 1.19%, closing at 76.66 USD/barrel.

“Oil prices are still facing downward pressure due to tough statements from the Fed,” said Andrew Lipow, president of the consulting firm Lipow Oil Associates.

On Tuesday, Mr. Powell’s testimony was the cause of the price. of the two oils fell more than 3%.

Barclays Bank has just lowered its forecast for the average Brent oil price in 2023 to $92 per barrel, down $6 per barrel from its previous forecast. The forecast for WTI oil price also decreased by 7 USD/barrel, to 87 USD/barrel. The reason Barclays gave for this move was that “Russian oil supplies maintained better than expected”.

“We forecast a recovery in air travel demand in China and neighboring countries, a return to industrial production, and a slowdown in oil supply growth in non-OPEC+ countries. will cause the oil market to fall into a shortage of supply by the end of the year,” the Barclays report said.