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Investing.com – The and the entire cryptocurrency market has been crashing since last night, dropping it down to $ 42,400, and posting a more than 6% 24-hour drop to $ 43,400 at the time of writing article.
The drop came shortly after the publication of Fed Minutes which confirmed an increasingly hawkish stance by the US central bank.
Hawkish Fed Minutes drop Bitcoin
The Fed minutes notably mentioned the reduction in the Fed’s balance, namely the sale of bonds that it bought en masse as part of its asset purchase program that it has started to reduce. Fed members believe that the reduction in the Fed’s balance sheet could start a few months after the first rate hike.
“Almost all of the participants agreed that it would probably be appropriate to begin the balance sheet clearance at some point after the first increase in the federal funds rate target range,” the meeting summary said.
Based on current market expectations, the Fed is expected to start raising its benchmark interest rate in March, which would mean balance sheet reduction could begin before the summer.
The minutes also indicate that once the process begins, “the appropriate pace of balance sheet flow would likely be faster than it was during the previous episode of normalization” in October 2017.
These resolutely hawkish remarks strengthened the Dollar, brought down stocks and raised bond rates, a context that has penalized Bitcoin, often seen as a protection against lax monetary policies, and which therefore loses an advantage if central banks start to tighten their monetary policies.
BTC / USD technical point
From a technical point of view, it should be noted that Bitcoin broke below the support of $ 44,000, and even briefly fell below the 4/12 low, marked following the latest BTC flash crash.
If the support level of $ 42,000 / $ 42,500 breaks, a drop to $ 40,000 will then be possible. On the upside, there are many concrete obstacles in the way of a possible rebound, including the 200-day moving average at $ 48,000 and the major psychological threshold of $ 50,000, with chart resistance at $ 52,000, which must be broken for the Bitcoin is once again showing a more bullish profile.
Update on other major cryptocurrencies
Finally, it should be noted that Bitcoin is not the only cryptocurrency to collapse since yesterday. shows even a steeper drop, currently just above $ 3,500, at -7.55% over 24 hours. It is however which shows the biggest drop in the Top 10, falling by almost 10% since yesterday.
It is also interesting to note that only 3 cryptocurrencies of the Top 100 escape the correction. (top 44) increased by 1% over 24 hours, (top 78) gained 18.7% and 2.72%.
Finally, note that this widespread fall in the cryptocurrency market has brought the total capitalization closer to 2 trillion, to 2,070 billion at the time of writing.
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