Major coins were trading in negative territory on Wednesday evening as the global cryptocurrency market capitalization fell 1.8% to $999.6 billion at . 9:31 PM EDT.
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Why it matters: Bitcoin, Ethereumand Dogecoin all traded lower after the Federal Reserve’s latest rate hike sent risk assets, including stocks, tumbling.
The tech-heavy Nasdaq closed 3.4% lower intraday, while the S&P 500 ended Wednesday’s session down 2.5%. At the time of writing, US stock futures were flat.
On Wednesday, all 12 Federal Open Market Committee members voted to raise the target fed funds rate by 0.75% to a range between 3.75% and 4%. This was the fourth straight such rate hike in the US central bank’s fight against inflation.
Edward Moyaa senior market analyst with OANDA, noted the dovish part of the Fed’s statement, in which the central bank said it will take into account the cumulative tightening of monetary policy, the lag with which monetary policy affects economic activity and inflation, and economic and financial developments.
“Bitcoin continues to trade above the $20,000 level as the Fed has confirmed what markets were hoping for; A tapering of tightening is coming. The initial Fed reaction was quite strong for most risky assets, but it was not sustained as the central bank will remain dependent, with the next round of inflation data,” Moya said in a note seen by Benzinga.
“Inflation has been high for 18 months and the Fed will remain committed to using their tools, meaning we won’t get the green light for risky assets until inflation drops sharply.”
Justin Bennett noted that the dollar index still has “bull flag potential” and is set to close above the 111.80 mark.
“Those who want an extended rally from [crypto] needs DXY back below this 111.50-111.80 range in the coming days,” the trader said.
So far have $DXY the bull flag potential still exists and it is set to close above the 111.80 area.
Those who want an extended rally from #crypto need DXY back below this 111.50-111.80 area in the coming days.
113.60 is in play until then. https://t.co/I2WhYnekqW pic.twitter.com/q4iWgR4kld
— Justin Bennett (@JustinBennettFX) 2 November 2022
Dogecoin, which rose in the last week after Elon MuskThe Twitter takeover was seen cooling off on Wednesday night.
The meme coin’s 24-hour trading volume fell 41.3% to $4.6 billion, according to CoinMarketCap data. At the time of writing, over 24 hours, Coinglass data indicated that $23.8 million worth of DOGE was liquidated.
Sergei ZhdanovCEO of cryptocurrency trading platform EXMOsaid in a note that for nearly three and a half days when DOGE traded between 6 and 9 cents, it accounted for 20% of the exchange’s weekly trading volume.
DOGE/USD volume distribution between 26 Oct. and November 1 – courtesy of EXMO
“A sharp jump in price occurred on October 29: DOGE rose by more than 50% in 8 hours. This is the main reason why there was relatively little trading volume between $0.09 and $0.12. The excitement in the market began with an increase of over 0.12 USD,” said Zhdanov.
In the second half of the week, trades were mostly between 12 and 15 cents, and this period accounted for 57% of the weekly trading volume.
Market Information Platform, Holynoted that Litecoin (LTC) is “currently on a nice run” and disconnected from the cryptocurrency pack.
“We have seen that the amount of addresses with 1000 or more [LTC] has grown rapidly since mid-June, and [LTC’s] price vs. [BTC] has grown +51% since June 12.
#Litecoin is currently on a nice run, and is temporarily disconnected from #crypto package. We have seen that the amount of addresses with 1000 or more $LTC has grown rapidly since mid-June, and $LTCits price vs. $BTC has grown +51% since June 12. https://t.co/uFXYNcnsRP pic.twitter.com/PASMdaezCD
— Santiment (@santimentfeed) 3 November 2022
Santiment noted that 314 new shark and whale LTC addresses have been created since May 27. At the time of writing, LTC was trading 16% higher at $63.80. For the week, the coin has risen 12.9%. It should be noted that LTC and DOGE can be mined together.
Read next: What the Fed’s latest rate hike means for the crypto world