Bitcoin, Ethereum Drop, Dogecoin Flat: Analyst Sees ‘Peak Crypto Pessimism’ Setting Ahead of ‘Fed’s Fireworks’ – Bitcoin (BTC/USD), Ethereum (ETH/USD), Dogecoin (DOGE/USD)
Major coins edged lower on Tuesday night as the global cryptocurrency market capitalization fell 2.5% to $921.9 billion at 8:18 PM EDT.
| Coin | 24 hours a day | 7 days | Price |
|---|---|---|---|
| Bitcoin BTC/USD | -3.15% | -6.3% | $18,935.15 |
| Ethereum ETH/USD | -3.5% | -15.7% | $1,328.70 |
| Dogecoin DOGE/USD | 0.2% | -2% | $0.06 |
| Cryptocurrency | 24-hour % change (+/-) | Price |
|---|---|---|
| XRP (XRP) | +6.35% | $0.41 |
| Helium (HNT) | +5.5% | $4.89 |
| Stellar (XLM) | +5% | $0.12 |
See also: Best USDC interest rates
Why it matters: Bitcoin and Ethereum traded lower ahead Federal Open Market Committee (FOMC) meeting on Wednesday.
On Tuesday, the S&P 500 and Nasdaq closed 1.1% and 0.95% lower, while at the time of writing US stock futures were marginally higher.
The probability of a rate hike of 75 basis points was 82%, according to the CME FedWatch Tool – a signal that investors can expect a hawkish move from the US central bank at the conclusion of the FOMC meeting.
Screenshot of CME Group’s Fedwatch tool
“The Fed begins its two-day policy meeting, and while an expectation of 75 basis points is widely expected, the key message from the Fed chairman [Jerome Powell] may be that prices will remain high for much longer than what the market expects,” said Edward Moyaa senior market analyst at OANDA.
On Bitcoin, Moya said, “Bitcoin’s fate will be determined by this week’s central bank decision fireworks, which could help fuel any selling to retest the summer lows. Peak pessimism is almost here for crypto, which is needed before long-term money piles back in .”
Justin Bennett tweeted Tuesday that the total market capitalization chart didn’t have the “best look” at the FOMC.
“A pullback would be bullish, but this $913B area is resistance for [the total market capitalization] as of now,” said the trader.
Not the best look for #crypto the market enters #FOMC.
A recovery would be bullish, but this $913B area is resistance for $TOTAL as of now.#Bitcoin $BTC $ETH pic.twitter.com/AdyokczZJa
— Justin Bennett (@JustinBennettFX) 20 September 2022
Cryptocurrency trader Michael van de Poppe said on Twitter that it was “impressive” that interest in Bitcoin was “terribly low at this point, whereas a year ago everyone was jumping over each other to get in.”
“The irony of this is that the quiet period is the best period to look for an asset that [Bitcoin]which is now.”
Impressive that the interest for #Bitcoin is terribly low at this point, whereas a year ago everyone was jumping over each other to get in.
The irony of this is that the quiet period is the best period to look for an asset that #Bitcoinwhich is now.
— Michaël van de Poppe (@CryptoMichNL) 20 September 2022
A tweet from community-driven analytics platform CryptoQuant noted that it was possible that selling pressure from long-term holders exerted downward pressure on the apex coin.
The CryptoQuant analyst pointed to a metric known as Exchange Inflow Coin Days Destroyed (CDD) to make their case. Higher values of the metric indicate that more long-term owners moved their coins for selling purposes.
Bitcoin Exchange Inflow CDD — Courtesy of CryptoQuant
The analyst said the metric has increased recently, and a move to the $16,000 level could be “the most likely scenario for Bitcoin in the short term.”
Read next: A look at Bitcoin, the crypto market ahead of the Fed’s rate decision: What to watch
