Major coins fell Tuesday evening, with the global cryptocurrency market capitalization dropping 2.5% to $921.9 billion as of 8:18 p.m. EDT.
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See also: Best USDC Interest Rates
Why is this important: Bitcoin and Ethereum traded lower before the Federal Free Market Committee (FOMC) meeting scheduled for Wednesday.
On Tuesday, the S&P 500 and Nasdaq closed down 1.1% and 0.95% respectively, while at the time of writing, US stock futures were slightly higher.
The probability of a 75 basis point rate hike was 82%, according to the CME FedWatch Tool – a signal that investors can expect a hawkish move from the US central bank at the end of the FOMC meeting .
Screenshot of CME Group’s Fedwatch tool
“The Fed begins its two-day policy meeting and although a 75 basis point expectation is widely expected, the key message from the Fed Chairman [Jerome Powell] maybe rates will stay high much longer than the market expects,” he said. Edouard Moyasenior 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 summer lows. Peak pessimism is almost there for crypto, which is needed before longer-term money returns.
Justin Bennett tweeted on Tuesday that the total market cap chart didn’t have the “best look” going into the FOMC.
“A recovery would be bullish, but this $913 billion area is resistance for [the total market capitalization] from now on,” the trader said.
— Justin Bennett (@JustinBennettFX) September 20, 2022
Trader in cryptocurrency 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 on each other to get in.”
“The irony about this is that the quiet period is the best time to look for an asset like [Bitcoin]who is now.
Impressive that the interest in #Bitcoins is terribly low at this point, whereas a year ago everyone was jumping on each other to get in.
The irony about this is that the silent period is the best time to look for an asset like #Bitcoinswho is now.
— Michael van de Poppe (@CryptoMichNL) September 20, 2022
A tweet from the community analytics platform CryptoQuant noted that it was possible that selling pressure from long-term holders would put downward pressure on the centerpiece.
The CryptoQuant analyst pointed to a metric known as Exchange Inflow Coin Days Destroyed (CDD) to make his point. Higher values of the metric indicate that more long-term holders moved their coins to sell.
Bitcoin Exchange Entry CDD — Courtesy of CryptoQuant
The analyst said the metric has recently spiked and a break to the $16,000 level could be “the most likely scenario for Bitcoin in the near term.”
Read more : A look at Bitcoin, the crypto market ahead of the Fed’s interest rate decision: what to watch?
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