Cryptocurrency markets continue to trade sideways this week as Bitcoin and Ethereum manage to hold support. Like yesterday, Bitcoin and Ethereum remain in the $20k and $1,500 range despite increasing trading volume over the past 24 hours. Let’s look at relevant crypto news affecting prices today.
- Bitcoin and Ethereum remain above support while trading volume is up significantly.
- During their latest meeting, the Federal Reserve approved another 0.75% rate hike later this month, which could add bearish momentum to stocks.
- Crypto markets are starting to depeg from traditional stocks as investors flock to cryptocurrencies as a safe haven against inflation.
- Bitcoin and Ethereum will likely test support in the next several days before deciding their next move.
Crypto Market Update
Even though Bitcoin remains above the $20k range, the prices are down slightly today after a Federal Reserve meeting on November 2nd. According to the official FOMC statement, the Federal Reserve approved another 0.75-point hike. According to the official statement:
“The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 3-3/4 to 4 percent.”
The current effective Federal funds rate as of October 26th, 2022, is at 3.08%. This means we could see a significant interest rate hike before the end of the year, as the current rates are almost 1% away from the target.
In response to the FEDs increased target, we saw stocks underperform this Wednesday as the NASDAQ closed down 2.61%, the S&P 500 was down 2.5%, and the Dow Jones is down 1.55%.
Despite the relatively bearish news for stocks, crypto markets continued to trade sideways, with a substantial increase in trading volume for Bitcoin and Ethereum. BTCUSD’s 24-hour trading volume is up 43%, while ETHUSD is up 72%.
The increase in trading volume is likely due to more traders flocking to crypto markets as a potential hedge against the global economy and inflation. While Bitcoin has been trading in tandem with stocks over the past year, cryptocurrencies are starting to depeg from traditional markets.
Today’s crypto fear and greed index is at a relatively high 30 points, still signaling fear but much higher than last month’s 20 points extreme fear level.
Bitcoin is trading at $20,353, down 2% in the past week, while Ethereum is up 0.06% in the past seven days, remaining above $1,500. We will likely continue to see sideways trading for Bitcoin and Ethereum until next week, when the market will prepare for its next move.
Keep in mind, with the news regarding the Fed’s interest rate. We might see Bitcoin and Ether test support again before the end of the week.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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