Choose country & language:

Cryptocurrencies crash on hawkish Fed

Home >  Daily Market Digest >  Cryptocurrencies crash on hawkish Fed

Written by:
Myrsini Giannouli

22 September 2022
Share the article

Cryptocurrency prices plummeted on Wednesday, as a result of a hawkish outcome of the much-anticipated Fed policy meeting. Stock markets also crumbled following the Fed’s decision to drag down cryptocurrency prices, which tend to follow stock market trends. 

Steep rate hikes increase global recession concerns, putting pressure on risk assets, such as cryptocurrencies. The US Fed raised its interest rate by 75 basis points on Wednesday to combat soaring US inflation rates. Federal Reserve Chair Jerome Powel, in a hawkish speech after the FOMC meeting, raised expectations for future rate hikes. Powel stated that the Fed is determined to curb inflation, even at the expense of economic growth, pointing to more rate hikes. 

Bitcoin price fell below $18,500 on Wednesday. If BTC declines further, support can be found at the $17,600 level, while resistance may be encountered near $20,500. 

Ethereum price dropped to the $1,240 level on Wednesday. If Ethereum's price declines, it may encounter support at the psychological level of $1,000. If Ethereum's price increases, resistance may be encountered near $1,640.

The long-anticipated Merge was completed last week, but Ethereum's price crashed after the merge. The Merge from the Proof-of-Work to the Proof-of-Stake method is a significant network upgrade that is expected to lead to an increase in demand for Ethereum. It is also a more environmentally-friendly consensus model, limiting drastically the energy consumption and carbon footprint of Ethereum.

Ethereum's price had been boosted in anticipation of the merger for months. The hype created around the merger had created a bullish sentiment for the cryptocurrency, which deflated following its completion, triggering a selloff.

BTC/USD 1h Chart

BTCUSD 1hr chart

 

ETH/USD 1h Chart

ETHUSD 1hr chart

The content provided in this material and/or any other material that this content is referred to, whether it comes from a third party or not, is for information purposes only and shall not be considered as a recommendation and/or investment advice and/or investment research and/or suggestions for performing any actions with financial products or instruments, or to participate in any particular trading strategy and cannot guarantee any profits. Past performance does not constitute a reliable indicator of future results. TopFX does not represent that the material provided here is accurate, current, or complete and therefore shouldn't be relied upon as such. This material does not take into account the reader's financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of TopFX, no reproduction or redistribution of the information provided herein is permitted.

Written by:
Myrsini Giannouli

Share the article:

Latest news

Dollar slides as US yields ease

Myrsini Giannouli 05 October 2022

Gold extends gains as US yields slip

Myrsini Giannouli 05 October 2022

Oil soars on OPEC output cut concerns

Myrsini Giannouli 05 October 2022

Cryptocurrencies edge higher as market sentiment shifts

Myrsini Giannouli 05 October 2022

Why TopFX

10-years

10-years

industry presence
as a Liquidity Provider

Spreads

Spreads
from 0.0 pips

and reliable execution

Segregated

Segregated

client funds

First-class

First-class

customer support