Bitcoin (BTC) and Ethereum (ETH), the two main cryptocurrencies in the world, continue to hold above $24,000 and $1,600 respectively. However, they experience a slight drop this morningwith Bitcoin falling to $24,500.
The crypto market continues to fluctuate, and Investors are keeping a close eye on the US Federal Reserve’s upcoming Federal Open Market Committee (FOMC) meeting minutes, which are expected to be released this week.
The recent downward trend in cryptocurrency prices may be linked to positive economic data from the United States. This reinforced the belief that the Federal Reserve will continue with its monetary policy tightening plan for a longer period than expected.
Besides, traders today appear cautious about large investments ahead of Coinbase’s earnings release and Hong Kong’s new VASP licensing system, both of which are expected to have a significant impact on the market in the coming weeks.
How Wednesday’s FOMC Meeting Minutes Will Impact Crypto Prices
?
There Wednesday release of Federal Open Market Committee (FOMC) minutes could have an impact on the price of Bitcoin. As the FOMC sets monetary policy in the United States, any hint of a change in that policy could affect financial markets, including the cryptocurrency market.
In a recent speech at the Economic Club of Washington, Federal Reserve Chairman Jerome Powell discussed the ongoing disinflation process and expressed his confidence in the ability of the Fed to reduce inflation to its target rate of 2%.
Although Powell’s response to January’s strong jobs report did not indicate a change in the central bank’s approach to future rate hikes, he warned that jobs data strong and durable could lead to a higher terminal level of Fed funds.
At its February 2023 meeting, the Federal Reserve raised the target range for the fed funds rate by 25 basis points, now from 4.5% to 4.75%. This is the second meeting in a row where the magnitude of the increase has been reduced, although borrowing costs are now at their highest level since 2007.
Bitcoin traders and investors will be watching this report closely. for any indication of inflationary concerns or changes in interest rates, which could potentially influence the price of Bitcoin.
Slight declines in the cryptocurrency market
The global cryptocurrency market has been doing well for the past few days, but saw a slight decline in the last 24-hour period. At the time of writing this article, the total market value was $1.11 trillion, representing a 0.68% decline in the value of cryptos over 24 hours.
Market inactivity could be related to the fact that the United States is celebrating President’s Day, which may cause traders to be cautious when placing large bids. As a result, Bitcoin also saw a slight drop in value from the previous day.
Meanwhile, Ethereum has also seen a decline over the past 24 hours, likely for the same reason. Other well-known cryptocurrencies such as Dogecoin (DOGE), Litecoin (LTC) and Ripple (XRP) also suffered slight losses.
Can a strong US dollar hurt cryptocurrency?
The US dollar has seen significant gains and showed strength across the board, boosted by positive US economic data that pushed back expectations of an extended period of monetary policy tightening by the Federal Reserve.
The market expects interest rates to rise due to recent statistics released by the world’s largest economywhich point to a tight labor market, persistent inflation, robust retail sales growth and a monthly increase in producer prices.
Market forecasts indicate that the fed funds rate should peak at just below 5.3% by July. The US dollar was bolstered by hawkish views from Fed members, who believe higher interest rates will be needed to successfully fight inflation.
As a result, the strength of the US dollar has been seen as a significant contributing factor to the drop in cryptocurrency values, including Bitcoin (BTC) and Ethereum (ETH).
The price of bitcoin
Looking at Bitcoin from a technical perspective, it traded sideways and maintained a tight range between $23,700 and $25,200. The immediate resistance level of the BTC/USD pair is currently at $25,200, and if the price exceeds this level, it could potentially hit the $26,000 mark.
However, leading technical indicators including RSI and MACD are showing divergence. The RSI is currently above 50 in a buy zone, while the MACD is forming histograms below 0 in a sell zone. This type of divergence often indicates investor indecision.
If the price of Bitcoin breaks below the current support level of $23,750, the next support level would be $22,850, which is determined by the 50% Fibonacci retracement mark.
Over the coming week, the focus will be on the FOMC meeting minutes, which are expected to be released on Wednesday. This information could potentially have an impact on the evolution of Bitcoin prices.
The price of Ethereum
The ETH/USD pair saw a surge after finding support near the $1,650 level. Over the 2-hour timeframe, Ethereum formed a symmetrical triangle pattern, which suggests indecision in the market and the price of ETH in a choppy, but narrow range.
If Ethereum experiences a Bullish bounce above the $1,650 level, he could potentially hit the $1,720 mark. Additionally, a break above the $1,720 level and the symmetrical triangle pattern could lead to a further uptrend in ETH prices. In both scenarios, the $1760 and $1800 price levels are likely to act as resistance levels.
In contrast, Ethereum has support levels around $1,650 or $1,625. The RSI and MACD show divergence, which is comparable to analyzing the price of Bitcoin.
This indicates that theInvestors may be waiting for an important event, such as the release of the FOMC meeting minutesto determine the next market trends.
Alternatives to Bitcoin and Ethereum to follow
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Disclaimer: This linked article presents the views of crypto industry players and is not part of the editorial content of Cryptonews.com.
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