Cryptocurrency market on September 20 CHK: Bitcoin has a slight recovery signal, green altcoins ahead of the Fed meeting

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2022-09-24 14:39:59

The meeting to announce the new interest rate of the Fed is about to be held, ahead of the event that the market has had a slight recovery.

Cryptocurrency Market

The largest cryptocurrency in the market had a good recovery today September 20. After plunging to $18,800, Bitcoin is back above $19,000. Currently, the BTC price is close to the $19,400 mark, up 5.31% from yesterday and reaching a 24-hour trading volume of $35.8 billion.

After establishing a local bottom at $18,250, Bitcoin briefly bounced above $1,000, closing the daily with a green candle and is currently trading around $19,400.

Bitcoin price movement on September 20, 2022

Given the growing correlation with equity markets, the prospect of a rise in global interest rates could continue to pressure BTC and ETH. The combination of technical and on-chain indicators suggests an impending drop in the market for Bitcoin and Ethereum.

Bitcoin Spent Output Age Bands (from 7 to 10 years) data, which tracks BTC numbers, shows the movement of more than 5,000 BTC starting September 4. MACD_D, user at on-chain analytics platform, CryptoQuant, argues that this is usually bad news for the Bitcoin price.

“The fact that 7-year holders start moving over 5,000 BTC could be a signal of a strong downtrend in the future. In the past, BTC has dropped in price 6 out of 7 times with this indicator showing a negative signal. Long term holders moving BTC means there will be an unusual price movement in the future.

When BTC goes sideways, Ethereum’s excessive rise will create a bubble. In particular, if ETH dominance increases by more than 20%, it is considered a good time to enter a short position.”

From a technical point of view, Bitcoin has entered a breakdown (bearish) phase, with a profit target at around $14,500 in 2022.

Meanwhile, Ether has also broken out of a symmetrical triangle pattern. Although the long-term outlook is quite bleak, with Bitcoin turning up in the short-term, the altcoin market has also shown signs of improvement.

So far, ETH has not been able to break back to the $1,400 zone with a lot of resistance from the sellers. The price of the largest altcoin in the market is at $1,358 with a 24-hour trading volume of $15.9 billion.

Top 10 tokens leading the market on September 20, 2022

Leading the recovery is Helium (HNT) with a gain of more than 16% in the past 24 hours, followed by ApeCoin (APE) and Algorand (ALGO) when both projects recorded gains of more than 10%.

Tokens in the top 10 by market capitalization are also in the green. BNB +4.2%, XRP +8%, ADA +2.4%, SOL +3.87%.

Other altcoins like TerraClassicUSD (USTC), Convex Finance (CVX), Lido DAO (LDO)… are all showing returns of over 5% on the day.

Market sentiment also had a slight recovery when the Greed and Fear Index (FGI) rose to 23 points, but it was still deep in the “Extreme Fear” zone. This shows that investors’ psychology is still quite insecure when the meeting of the Fed is getting closer and closer.

Cryptocurrency Market FGI Index September 20, 2022

Macro factors

The mood on Wall Street at the moment is waiting for the outcome of the Fed meeting, with the possibility of a 0.75 percentage point rate jump being applied almost certain.

The US market rallied in trading on Monday (September 19), before the US Federal Reserve (Fed) begins its regular monetary policy meeting on Tuesday. Oil prices also rose, as concerns about tight supply outweighed worries about falling demand and rising interest rates.

At the close, the Dow Jones Industrial Average rose 197.26 points, or 0.64%, to close at 31,019.68 points. The S&P 500 index rose 0.69% to 3,899.89 points. The Nasdaq index rose 0.76% to 11,535.02 points.

The market struggled between bears and gains for the duration of the session. At one point, the Dow Jones lost 263 points, while the S&P 500 and Nasdaq fell more than 0.9% each.

US Treasury yields continued to rise as investors on Wall Street expected the Fed to raise rates by 0.75 percentage points at the end of its meeting on Wednesday. Yields on 10-year US Treasuries surpassed 3.51%, an 11-year high.

After a brief period of glimmering hope that the Fed may be nearing the end of a cycle of drastic tightening, investors have recently sold off stocks on concerns that the world’s most powerful central bank could counter the market. inflation “overwhelmed” and pushed the economy into recession.

The mood on Wall Street at the moment is waiting for the outcome of the Fed meeting, with the possibility of a 0.75 percentage point rate jump being applied almost certain. Investors want to wait and see how the Fed will send signals about the monetary policy outlook in the near future, as well as the Fed’s assessment of the US economy, including growth, inflation and employment. .

“We are in a ‘wait and see’ position and the market waits for some bullish or bearish catalyst to break out of the current range,” said 50 Park Investment CEO Adam Sarhan. in an interview with CNBC. “The market is struggling to navigate because of the lack of decisive information.”

Of the 11 major S&P 500 industry groups, nine gained this session, led by materials, non-essential consumption and industrials. The financial group also rose as rising interest rates could help banks improve profitability.

Brent crude oil futures in London rose $0.47/barrel, or 0.51%, to close at $91.82/barrel. WTI oil price increased by 0.42 USD/barrel, equivalent to 0.49% increase, reaching 85.53 USD/barrel.

Oil prices continue to face downward pressure on concerns that higher interest rates will push the global economy into recession, pulling in demand for energy. The strong uptrend of the USD also makes oil prices difficult. However, the price of “black gold” is still being supported by the tightening of oil supply in the world.

An internal OPEC+ document obtained by Reuters shows the bloc’s actual oil production at 3.583 million bpd less than the target. Previously, in July, OPEC+’s actual oil production was 2.892 million bpd lower than the target.

OPEC+ is an alliance between the Organization of the Petroleum Exporting Countries (OPEC) and a number of non-member countries including Russia.

“Opec+ production surveys to date show that the amount of oil produced by the bloc is in fact lower than the production quota set by the bloc. This makes the market feel that OPEC+ cannot increase production if the market requires it,” said Andrew Lipow, President of Lipow Oil Associates.

Just like in the stock market, many oil traders are waiting outside the market for the Fed meeting this week, said Dennis Kissler, vice president of trading at BOK Financial.

The USD is still at the price zone near the highest level of 20 years against other major currencies. The strong greenback is a source of downward pressure on basic commodities, including crude oil, as these are priced in USD in international trade.

Last week, the oil market was uncertain when receiving the forecast of the International Energy Agency (IEA). The regular report of the organization based in Paris, France said that in the fourth quarter of this year, decelerating economic growth will make the growth of global oil demand zero.

However, there is good news for the bulls, which is that China is starting to relax anti-Covid restrictions. When these restrictions are eased, energy demand in the world’s largest economy could pick up again.

A major interest rate hike by the US Federal Reserve this week could accelerate the exit of global hedge funds from emerging markets in Asia, as markets It is facing pressure from the strong appreciation of the USD.

Data from Bloomberg news analysis shows that foreign investors have had four consecutive weeks of net selling on emerging stock markets in Asia excluding China.

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