The U.S. central bank may raise rates yet again, according to the minutes from last month’s Federal Open Market Committee (FOMC) meeting, released today. InJuly, a 0.75 percentage point hike raised rates to the 2.25% to 2.5% range. The FOMC now plans to double the rate of balance sheet shrinkage in September.
Members suggested that the pace of rate hikes and balance sheet reduction would be contingent upon market conditions and responsive to them. They further suggested that it may become necessary to adjust the rate of tightening policies in order to assess their real impact on inflation. The minutes read:
“Members agreed that, in assessing the appropriate stance of monetary policy, they would continue to monitor the implications of incoming information for the economic outlook and that they would be prepared to adjust the stance of monetary policy as appropriate in the event that risks emerged that could impede the attainment of the Committee’s goals.”
Markets were predictably cool in the hours leading up to the release of the minutes; major cryptocurrencies and stock indices showed steady downtrends in the hours before the announcement. However, stock and crypto markets appear to have opposite responses to the news in the hours since the minutes were released. Both the Nasdaq and Dow Jones Industrial Average enjoyed brief surges immediately following their release—from 12,935 to 13,053 and from 33,988 to 34,159 respectively within the first hour. Both were short-lived, however, and they are now trading at pre-announcement levels.
Cryptocurrencies, on the other hand, took an immediate but modest hit. Bitcoin and Ethereum both continued mild downturns in the wake of the announcement. They suffered 2.5% and 2% losses on the day, respectively.
FOMC Meeting crushes Bitcoin and Ethereum price
Bitcoin price failed to stay in a positive zone above the $24,000 level. BTC startedanother declineand traded below the $23,650 support zone.
There was a clear move below the $23,500 level and the 100 hourly simple moving average. Finally, the price found support near the $23,200 zone. A low was formed near $23,193 and the price is now consolidating losses.
Bitcoin price is now trading below the $23,650 level and the100 hourly simple moving average. On the upside, an immediate resistance is near the $23,500 level. It is near the 23.6% Fib retracement level of the recent decline from the $24,438 swing high to $23,193 low.
The first major resistance on the upside sits near the $23,800 level. It is near the 50% Fib retracement level of the recent decline from the $24,438 swing high to $23,193 low.
The main resistance is forming near the $24,000 zone and the 100 hourly simple moving average. There is also a connecting bearish trend line forming with resistance near $24,000 on the hourly chart of the BTC/USD pair. A close above the $23,800 and $24,000 resistance levels might start another increase.
Source: BTCUSD on TradingView.com
Hourly MACD – The MACD is now losing pace in the bearish zone
Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now below the 50 level
Major Support Levels – $23,320, followed by $23,200
Major Resistance Levels – $23,500, $23,800 and $24,000
Ethereum remained in abearish zonebelow the $2,000 resistance zone. ETH traded below the $1,850 support zone to move further into a bearish zone.
The decline found support near the $1,820 level. Ether price is now consolidating losses above the $1,820 level. It is now trading below $1,900 and the 100 hourly simple moving average. The bears are active near the 23.6% Fib retracement level of the recent decline from the $1,956 swing high to $1,820 low.
An immediate resistance on the upside is near the $1,885 level and the100 hourly simple moving average. It is near the 50% Fib retracement level of the recent decline from the $1,956 swing high to $1,820 low.
The main resistance is now forming near the $1,900 and $1,920 levels. There is also a major bearish trend line forming with resistance near $1,920 on the hourly chart of ETH/USD. A clear move above the $1,920 resistance could push the price towards the $1,950 level.
Source: ETHUSD on TradingView.com
Hourly MACD–The MACD for ETH/USD is now losing momentum in the bearish zone
Hourly RSI–The RSI for ETH/USD is now below the 50 level
Major Support Level – $1,800
Major Resistance Level – $1,920
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