Bitcoin plunge halted as markets await Fed decision

Crypto markets steadied on Tuesday after plummeting on Monday. Crypto markets dropped on Monday weighed down by concerns about Binance. Binance is the largest crypto exchange in the world and was sued by the Securities and Exchange Commission last month. Reports of fresh economic transgressions involving Binance CEO Changpeng Zhao put pressure on cryptocurrencies on Monday.

Cryptocurrencies started to recover on Tuesday as markets focused on Wednesday’s Fed rate decision. The U.S. Federal Reserve kept its interest rate steady at its June policy meeting to a target range of 5.00% to 5.25%. The Fed has signaled that its tightening cycle is not over yet, and market odds are in favor of a 25-bp rate hike on Wednesday. 

Even though another rate hike is widely expected, future rate hike expectations have dropped, boosting risk sentiment, and providing support for risk assets. There is considerable doubt on whether the Fed will continue hiking rates after this week’s rate increase. Cooling US inflation rates have shifted Fed interest rates expectations towards a less hawkish direction.

Bitcoin price plummeted on Monday, dropping below the key $30,000 level, and touching $29,000. Bitcoin steadied on Tuesday, though, climbing back to $29,300. If the BTC price declines, support can be found near $29,000, while resistance may be encountered near $30,400. 

Ethereum price also started to recover on Tuesday after Monday’s plunge, climbing back to the $1,860 level. If Ethereum's price declines, it may encounter support near $1,817, while if it increases, resistance may be encountered near $1,930.

BTC/USD 1h Chart

ETH/USD 1h Chart

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Written by:
Myrsini Giannouli

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