Bitcoin and major altcoins took a tumble as investors disregarded the U.S. Federal Reserve’s decision to pause its streak of interest rate hikes. Bitcoin, the leading cryptocurrency, dropped to around $24,990, reaching its lowest point since mid-March, media reports said.
Over the past five days, Bitcoin had been hovering near $26,000 as investors grappled with the ramifications of regulatory actions against crypto exchanges like Binance and Coinbase, along with signals from the Fed and broader macroeconomic uncertainties.
Although the Fed’s decision to keep rates unchanged was widely anticipated, the initial market reaction leaned toward the downside. Joe DiPasquale, CEO of BitBull Capital, noted that the market expected the pause to be temporary, leading to a negative response. DiPasquale emphasized that Bitcoin’s ability to maintain the $25,000 level would be crucial for continued consolidation.
Ether, the second-largest cryptocurrency, also experienced a decline, trading at $1,650, representing a 5.1% drop from the previous day. Other major cryptocurrencies affected by the recent SEC actions, such as ADA (Cardano) and SOL/MATIC (Solana and Polygon), also recorded significant losses. The overall performance of the crypto market, as measured by the CoinDesk Market Index, remained relatively stagnant.
Despite the current downtrend, there were indications of potential bullish movements. Valkyrie Investments highlighted a price pattern called a “throwback” on Bitcoin’s daily chart, suggesting a rally toward $37,000. A throwback occurs when prices drop to a former breakout level or a support level that was once a resistance level. Typically, prices surge after the throwback is completed, according to Thomas Bulkowski’s “Visual Guide to Chart Patterns.”
While cryptocurrencies experienced a downturn, equity indexes faced their own challenges. Concerns persisted that the Fed’s temporary halt to rate increases might be short-lived, with the focus shifting toward curbing inflation. The Nasdaq Composite and S&P 500 saw marginal gains, but the Dow Jones Industrial Average dipped by 0.7%.
Markus Levin, co-founder of XYO Network, expressed optimism about the shifting global macro environment, with a focus on growth and a potential recession. Levin believed that Bitcoin and other digital assets had likely reached their bottom and anticipated sideways price action with intermittent bouts of volatility in the coming months. He also highlighted the potential impact of the BTC halving event scheduled for next year, which he believed could trigger a significant rally.
