- The price of the two cryptocurrencies fell due to Powell’s statement.
- BTC and ETH may continue to trade sideways in the short term.
Major cryptocurrencies, including Bitcoin [BTC]and Ethereum [ETH]witnessed a decline after Federal Reserve Chairman Jerome Powell said he does not expect any rate cuts at the next FOMC meeting, scheduled for March.
FOMC stands for Federal Open Market Committee. It is the branch of the Federal Reserve System responsible for monetary policy in the US
Before Powell’s predictionsome market participants have predicted a possible decline in high interest rates. But the unexpected statement caused a huge boom in the market.
The chair says: ‘It’s not time’
However, forecasts that rates would remain unchanged this month were in line with the Fed’s latest decision. According to the policy team, the standard would remain between 5.25% and 5.50%.
At the time of writing, Bitcoin’s price is down 2.12% to $42,587. Ether, on the other hand, also saw a decline. The value of the altcoin at the time of writing was $2,280, indicating a decline of 3.98%.
Source: CoinMarketCap
Other cryptocurrencies, including Solana [SOL] and Cardano [ADA]were also affected, reinforcing how the market was not thick-skinned about financial policy.
AMBCrypto saw Powell live during the press conference, where the chairman gave reasons for the projection. According to him,
“Inflation has decreased significantly over the past year. But it remains above our overall target of 2%. We will also need to see continued evidence to build confidence that inflation is moving sustainably toward our target.”
BTC and ETH’s reaction to the statement underlines investors’ cautious approach to the market. Assuming Powell had hinted at rate cuts, prices would have risen.
No match for BTC and ETH
On the daily BTC/USD timeframe, On Balance Volume (OBV) decreased. The decline shown by the indicator reflects investors’ cautious approach towards Bitcoin.
If the OBV continues to decline, BTC could fall below $42,000 as this would indicate a lack of buying pressure.
Meanwhile, the 9 EMA (blue) and 20 EMA (yellow) were almost at the same spot as the price of BTC. This position indicates a consolidation in the meantime.
As such, BTC could continue trading within a range of $41,826 and $43,217.
Source: TradingView
A look at the Relative Strength Index (RSI) confirmed sentiment that Bitcoin could continue to move sideways. But if the RSI rises above 50.00, the coin could make attempts to reach $44,000.
However, signals from other indicators showed that the potential looked bleak.
ETH’s price movement was similar to that of Bitcoin. At the time of writing, the Accumulation/Distribution (A/D) indicator suggested that participants had slowed down in purchasing ETH.
But this does not mean that the altcoin underwent a serious spread.
Read Bitcoin’s [BTC] Price forecast 2023-2024
Like BTC, the RSI on ETH’s daily chart confirmed a lack of buy orders. In a very bullish situation, ETH could rise above $2,300 again.
If interest rates do not fall in March, the price of the currency could fall lower.
Source: TradingView
