Bitcoin fell below $19,000 on Wednesday, as markets prepared for a potential 100 basis point interest rate hike from the United States central bank. Although the consensus for a rate increase remains at 0.75%, some believe that with inflation remaining at historically high levels, a 1.00% hike could be on the cards. Ethereum remained lower on the news, trading marginally above $1,300.
Bitcoin (BTC) fell below $19,000 earlier in the day, as traders began to prepare for today’s Federal Open Market Committee (FOMC) meeting.
Market uncertainty remains rife as speculation grows on whether the Fed could go as far as raising rates by 100 basis points.
As a result, BTC/USD fell to a low of $18,813.46 earlier today, a day after hitting a peak above the $19,600 level.
Looking at the chart, this most recent drop has pushed the 10-day (red) moving average on the brink of a downwards cross with its 25-day (blue) counterpart.
Should this happen, we could see bitcoin not only slip below $19,000, but potentially drop under $18,000 for the first time since June.
As of writing, the token is trading at $19,153.66, as prices continue to consolidate prior to this afternoon’s announcement.
Ethereum (ETH) was also consolidating on hump day, with the token trading marginally above the $1,300 level.
Following a high of $1,378.68 on Tuesday, ETH/USD moved to an intraday low of $1,319.20 earlier today, as sentiment in crypto markets remained bearish.
Traders have been tentative in recent days, opting to liquidate positions as opposed to holding onto longs ahead of the rate hike.
The rise in uncertainty also came following a collision on the 14-day relative strength index (RSI), with the index hitting a resistance point.
As of writing, the index is tracking at 38.43, which is marginally below a ceiling of 39.00, currently the main obstacle preventing prices from climbing.
Although there remains a high level of fear in the marketplace, should we see a breakout of the aforementioned ceiling, ETH bulls may reenter the market, and attempt to take price above $1,400.
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Will the Federal Reserve decide to hike rates by 0.75% or 1.00% today? Leave your thoughts in the comments below.
Eliman brings an eclectic point of view to market analysis, he was previously a brokerage director and retail trading educator. Currently, he acts as a commentator across various asset classes, including Crypto, Stocks and FX.
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