Crypto markets took a downward turn on Thursday as investors absorbed the implications of Federal Reserve Chair Jerome Powell’s hawkish comments, suggesting that financial conditions will remain tight and interest rates will stay high for an extended period. Bitcoin saw a decline to approximately $26,600, marking a 1.5% drop over the past 24 hours. Interestingly, positive news regarding delays in payouts related to the Mt. Gox debacle, which had long been a source of selling pressure in digital asset markets, had little impact on Bitcoin’s price. Ether also faced a tough day, breaking below the $1,600 mark and extending its losing streak against BTC. It reached a fresh 14-month low against the leading crypto, with ETH declining by 1.8% during the day.
Bitcoin has demonstrated a rollercoaster ride in its price movements this year. While it experienced a strong recovery earlier in the year, reaching as high as $32,000 in August, it then faced a downturn, falling below $26,000. However, in recent days, Bitcoin has shown resilience, surging by nearly 4.5%. At the time of writing, Bitcoin is trading at $27,128 and appears to be in a bullish phase. It’s possible that it could challenge and potentially break the $28,000 resistance level by the end of the month. However, it’s essential to keep a close eye on the developments in the space. Despite the seemingly calm waters in the crypto market, there are bullish undercurrents for Bitcoin (BTC), hinting at the potential for a significant price rally. One key indicator is the percentage of Bitcoin’s circulating supply that has been active on-chain within the past month. This metric recently reached a record low of 5.4%, indicating a decrease in the number of coins changing hands and suggesting weakness on the supply side. Additionally, about 70% of the circulating supply has remained inactive for over a year, showing a preference for long-term holding among Bitcoin holders.
Ethereum faced a decline after encountering resistance at the $1,660 and $1,670 levels. This decline led to Ethereum slipping below the $1,620 support level, entering a bearish phase, and showing weaker performance compared to Bitcoin. The bears managed to push Ethereum’s price below the critical $1,600 support level and the 100-hourly Simple Moving Average (SMA). The price reached a low point near $1,568 and is currently attempting to initiate a recovery. Ethereum did briefly move above the $1,580 level, but it continues to trade below $1,620 and the 100-hourly SMA. Gas prices on Ethereum’s mainnet temporarily skyrocketed on Sept. 21 following a series of “inefficient transactions” carried out by an address labelled Binance 14 on block explorer Etherscan.
On the macro front, the U.S. Consumer Price Index (CPI) saw a notable surge of 0.6% compared to the previous month. This increase represents the most significant monthly rise in over a year, with a significant portion of the surge attributed to rising gasoline prices. The Federal Reserve’s announcement of one more rate hike for this year and fewer cuts for the next year had a significant impact on traditional markets. The 10-year Treasury yield saw a substantial increase, reaching a 16-year high. Meanwhile, the DXY index, which measures the strength of the U.S. dollar against a basket of major currencies, briefly surged to near 106, a level not seen since the peak of the U.S. regional banking distress in March. In response to these developments, U.S. equity markets experienced a sell-off, with the broad-market S&P 500 index losing 1.6% and the tech-heavy Nasdaq Composite Index plunging 1.8%. The stringent Fed policy’s strain on the equity market could also have a downward effect on crypto prices.
Technical Outlook:
Bitcoin:
BTC tested the key support of $25,000 (Horizontal Trendline & 50% Fibonacci Retracement Level) as it reached a low of $24,901. However, it did not give a daily closing below the support and post that, the asset witnessed some recovery by forming four consecutive green candles and rallied up to $27,483. BTC has strong resistance at $28,500 and $32,500 and to witness a rally it needs to break, close and sustain above $32,500 whereas a break below the support of $25k will lead to further downfall.
ETHEREUM:
ETH last week made a low of $1,531 and bounced back from the key support level of $1,533 (78.6% Fibonacci Retracement Level) up to $1,669.3. The asset is trading in a broad range from $1,725 to $1,550 with low volumes. Breakouts on either side of the range with good volumes will further decide the trend for ETH.
BNB:
BNB after breaking the long-held support of $220 dropped and made a low of $203.4. The asset made a ‘Morning star’ pattern at the low. However, the bulls are struggling to break the crucial resistance level of $220. Once it breaks, closes and sustains above $220 then we can expect it to further rally up to $250-$255.
Weekly Snapshot:
| USD ($) | 14 Sep 23 | 14 Sep 23 | Previous Week | Current Week | |||
| Close | Close | % Change | High | Low | High | Low | |
| BTC | $26,539 | $26,568 | 0.11% | $26,775 | $24,930 | $27,489 | $26,241 |
| ETH | $1,627 | $1,584 | -2.64% | $1,657 | $1,553 | $1,669 | $1,573 |
| BNB | $212.28 | $211.00 | -0.60% | $218.22 | $204.36 | $221.01 | $209.59 |
| crypto | 1w – % Vol. Change (Global) |
| BitCoin (BTC) | -3.09% |
| Ethereum (ETH) | -14.35% |
| Binance Coin (BNB) | 24.02% |
| Resistance 2 | $32,500 | $2,150 | $0.95 | $255 |
|---|---|---|---|---|
| Resistance 1 | $28,500 | $1,750 | $0.75 | $220 |
| USD | BTC | ETH | Matic | BNB |
| Support 1 | $25,000 | $1,500 | $0.50 | $200 |
| Support 2 | $22,500 | $1,350 | $0.41 | $2180 |
Market Updates:
- Binance Holdings, its U.S. counterpart, and CEO Changpeng Zhao have filed a joint motion seeking the dismissal of the lawsuit against them by the SEC.
- An Ethereum developer has managed to get ChatGPT to launch its own ERC-20 token, AstroPepeX, modelled off data from the top traded tokens on Uniswap.
- Marieke Flament, CEO of Near Foundation has resigned.
- Crypto-friendly brokerage firm eToro is expanding its crypto services worldwide after securing new regulatory approval in Europe.
