Bitcoin, Ethereum Move Sideways, Dogecoin Falls Amid Jerome Powell's Hawkish Tone On Rate Cuts: Analyst Says Dip Temporary Before BTC Highs
Bitcoin and Ethereum experienced fluctuations following Federal Reserve Chair Jerome Powell's comments on interest rates, with Bitcoin dipping below $116,000 before recovering. Ethereum saw gains despite a drop in trading volume. The cryptocurrency market faced $432 million in liquidations, with Bitcoin's open interest rising by 1.23%. Analysts suggest the current dip is temporary, with potential for new all-time highs in August/September. The global cryptocurrency market cap is at $3.86 trillion, while major stock indices closed lower amid Powell's hawkish tone on rate cuts.
Leading cryptocurrencies felt the pinch on Wednesday after Federal Reserve Chair Jerome Powell said “no decision” has been made on a September rate cut.
What Happened: Bitcoin dipped below $116,000 late afternoon but recouped the gains overnight. Ethereum extended its gains overnight following the afternoon pullback, even as trading volume cooled off.
A White House advisory group formed under President Donald Trump released a cryptocurrency blueprint urging federal agencies to clarify rules concerning digital assets.
Meanwhile, cryptocurrency liquidations hit $432 million in the last 24 hours, with Ethereum alone accounting for $101 million.
Interestingly, Bitcoin's rise to $120,000 could liquidate $430 million worth of BTC short positions on Binance.
Bitcoin's open interest rose by 1.23% in the last 24 hours. When the spot price is sideways and open interest is increasing, it typically precedes a breakout in either direction.
Despite the weakness, "greed" sentiment persisted in the market, according to the Crypto Fear & Greed Index.
Top Gainers (24 Hours)
The global cryptocurrency market capitalization stood at $3.86 trillion, contracting 0.24% in the last 24 hours.
Major stock averages closed lower on Wednesday. The Dow Jones Industrial Average slid 171.71 points, or 0.38%, to close at 44,461.28. The S&P 500 dipped 0.12% to end at 6,362.90. The tech-heavy Nasdaq Composite was the silver lining, gaining 0.15% to end at 21,129.67.
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The Federal Reserve held interest rates steady at 4.25%-4.50%, as expected, followed by hawkish comments from Powell.
Powell said that "no decisions" have been made about a rate cut in September, pouring cold water on investors' hopes. The odds of a 25 basis point cut fell to 43% from 63% the day before, according to the CME FedWatch tool.
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Analyst Notes: Widely followed cryptocurrency analyst and trader Michaël van de Poppe suggested that the cryptocurrency market dip following no change in rate cuts is temporary.
"I think it’s a great chance to accumulate. Could be that we fall deeper, but not for long. August/September new ATHs," the analyst predicted.
Another cryptocurrency-focused trader, Tom Tucker, spotted Bitcoin forming a bullish pennant on its daily chart.
A bullish pennant is a continuation chart pattern, indicating resumption of an uptrend after a pause or consolidation period.
"With the Crypto Fear & Greed Index still in the greed zone at 63, and Bollinger Bands tightening, a breakout could be near. Target on breakout? $143,550," Tucker projected.
Photo Courtesy: Yalcin Sonat On Shutterstock.com
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