Cryptocurrency market on September 19 CHK: Bitcoin plunges, breaks $19,000, altcoins in the red

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2022-09-21 08:25:46

The selling pressure has caused the Bitcoin price to continuously plunge and hit $ 18,800 in the early morning of the week.

Cryptocurrency Market

Over the past 24 hours, Bitcoin has turned lower after failing to regain the $20,000 threshold. After establishing a local top at $20,100, the market’s largest cryptocurrency returned to the area below $19,500 and closed weekly at $19,416. This is considered the lowest weekly close since the end of June 2022.

Currently, Bitcoin price is at $18,500, selling pressure is strong, 24-hour trading volume spikes to $36 billion (+53% compared to yesterday). The signs suggest that the downside momentum will continue towards the lower zone.

Bitcoin price movement on September 19, 2022

In the past, when the price touched a long-term support level, the market would often create a strong pullback. Therefore, if the same thing happens, Bitcoin is likely to face a major pullback, forming a bear trap, before the next bull run begins.

The aforementioned observation is also reflected in Bitcoin’s long-term pricing model. At the moment, the market is trading below the fair value zone. This is proof that BTC is nearing the bottom of an ongoing bearish cycle.

BTC’s MVRV ratio seems to indicate that it is regaining its strength, but this is not a guarantee that the price is currently on a recovery trajectory. In fact, several other Bitcoin indicators indicate that bears are still dominating the market.

Addresses holding more than 1,000 BTC have now dropped to a 4-week low.

Furthermore, the number of new BTC addresses is also starting to level off. These observations show that investment flows tend to flow out of the market and growth slows down. This further increases the possibility of triggering a short-term bearish momentum for the largest cryptocurrency.

Although the long-term indicators indicate that BTC is at the bottom of a bearish range, the short-term indicators are still signaling “caution,” as a major sell-off could still occur unexpectedly.

Top 10 tokens leading the crypto market on September 19, 2022

With Bitcoin plunging, the rest of the market’s tokens are in the red. Ethereum (ETH), recorded a massive 10% drop in 24 hours and 25% on the week. ETH price has officially broken the $1,300 mark and is anchored at $1,297. The trading volume spiked 89% on the day and reached a value of $18 billion.

Tokens in the top 10 by market capitalization also suffered the same fate as BNB -6.3%, XRP -5%, ADA -9.33%, SOL and DOGE all -8%.

Major projects in the top 100 are not out of luck, with a drop of up to double digits. The lead is Ravencoin (RVN) with nearly 14% evaporation in 24 hours, followed by Ethereum Classic (ETC), Kusama (KSM), Curve DAO Token (CRV), EOS (EOS), Celsius (CEL)… decrease by more than 10%.

The market sentiment after stable days became strongly volatile. The Greed and Fear Index (FGI) is stopping at the Extreme Fear zone at 21 points.

Cryptocurrency Market FGI Index September 19, 2022

Macro factors

Economists believe that the US Federal Reserve (Fed) will send a tougher signal at its regular monetary policy meeting this week.

At the next regular monetary policy meeting, the Fed’s prime interest rate until December will increase to 4% and will remain high through 2023, economists said in a survey. by Bloomberg News.

According to this survey, the Federal Open Market Committee (FOMC) – the body that decides interest rates in the Fed – will raise interest rates by 0.75 percentage points for the third time in a row at the end of its meeting at 2pm on Wednesday. Wednesday (September 21) Washington time. With this jump, the Fed’s basic interest rate will increase to the threshold of 3-3.25%.
Experts in the survey expect that in the forecast that the Fed makes after this meeting, the world’s most powerful central bank expects interest rates to rise to 4% by the end of this year and continue to inched up into next year, before cuts begin in 2024 to bring rates back to 3.6%.

That would be a big shift from the Fed’s forecast in June, reflecting a tougher fight against inflation after the recently released August consumer price index (CPI) for Inflation in the US was hotter than expected. The aforementioned Bloomberg survey was conducted with the participation of 45 economists, taking place from September 9-14.

Fed Chairman Jerome Powell has said that the Fed is strongly committed to bringing inflation back to its 2% target, and will not stop fighting against price escalation any time soon because of the data. indicates a weakening of the economy. The basis for the Fed to increase its aggressiveness is the August CPI report – statistics showing that inflationary pressure is spreading and penetrating deeply into the economy.

How high can the rate go? At its most recent meeting in July, he said that the Fed will set rates on a meeting-by-meeting basis. This cautiousness of the head of the world’s most powerful central bank makes the “dot plot” – the forecast of the basic interest rate that the Fed makes at every policy meeting – will become the focus of the attention of investors. investors at this week’s meeting. In addition, markets will also look forward to Mr. Powell’s press conference, which is expected to begin about half an hour after the Fed’s policy decision.

The path of interest rates that economists in the Bloomberg survey forecast is less “stretch” than the market forecast. Investors are also placing their main bets on the possibility that the Fed will raise interest rates by 0.75 percentage points on Wednesday, but believe that by the end of the year, interest rates will increase to around 4.23%.

China increased its holdings of US Treasuries in July for the first time in seven consecutive months of net selling, while Japan reduced its holdings, according to data released by the Ministry of Finance recently.

Accordingly, in July, China’s holdings of US Treasury bonds increased to $970 billion, $2.2 billion more than June’s $967.8 billion – the lowest level since May. In May 2010, when Beijing owned $843.7 billion in US Treasury bonds.

While China was a net buyer again, Japan was a net seller of $2 billion in US Treasuries, reducing its holdings to $1,234 billion in July, from $1.236 billion in June. With this holding, Tokyo is still is Washington’s largest foreign creditor.

The reduction of Japan’s holdings of US Treasuries is more or less consistent with developments in the currency market. In July, the Japanese Yen strengthened against the USD. Recently, the Yen has strongly depreciated again due to the continuous escalation of the USD exchange rate.

The rapid decline of the Japanese Yen since the beginning of the year has led observers to raise the possibility that the country’s authorities will intervene in the foreign exchange market to protect the domestic currency exchange rate. However, until now, Tokyo has not officially announced such a move. Besides, the Bank of Japan (BOJ) still maintains its policy of maintaining an easy monetary policy to support growth. Since the beginning of the year, the Yen has fallen 19.5% against the USD.

Also according to data from the US Treasury Department, the total amount of US Treasuries held by foreign investors in July increased by $71 billion compared to June, to $7.501 billion from $7,430 billion.

In terms of transactions alone, foreign investors net bought $23.12 billion in US Treasuries in July, down from a net buying of $58.9 billion recorded in June. for the third consecutive year, foreign investors were net buyers of US Treasury bonds.

Contrary to the net buying of US government debt, foreign investors continued to be net sellers of US stocks in July. This is the 7th consecutive month that foreign investors have net sold US stocks, with a net selling volume of 60.32 billion. USD, up from a net selling of $25.36 billion in June and the highest since March.

However, foreign investors continued to be net buyers of US corporate bonds, with a net buying of $8.78 billion in July, down from $13.99 billion in June. This is also the 7th consecutive month. foreign investors are net buyers of US corporate bonds.

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