- The price of the two cryptocurrencies fell because of Powell’s statement.
- BTC and ETH might continue trading sideways in the short term.
Major cryptocurrencies, including Bitcoin [BTC], and Ethereum [ETH], witnessed a slide after Federal Reserve chair Jerome Powell said he does not expect rate cuts by the next FOMC meeting scheduled for March.
FOMC stands for Federal Open Market Committee. It is the body of the Federal Reserve System responsible for monetary policy in the U.S.
Before Powell’s forecast, some market participants have forecasted a possible drop in the high interest rates. But the unexpected statement sent a sonic boom throughout the market.
The chair says, “It’s not time”
However, the predictions that rates would remain unchanged this month were in agreement with the Fed’s latest decision. According to the policy team, the standard would remain between 5.25% and 5.50%.
At press time, Bitcoin’s price has dropped by 2.12% to $42,587. Ether, on the other hand, also experienced a drawdown. The altcoin’s value, as of this writing, was $2,280, indicating a 3.98% decline.
Source: CoinMarketCap
Other cryptocurrencies, including Solana [SOL] and Cardano [ADA], were also affected, reinforcing how the market was not thick-skinned to financial policies.
AMBCrypto watched Powell live at the press briefing, where the chair gave reasons for the projection. According to him,
“Inflation has eased notably over the past year. But it remains above our overall goal of 2%. Also, we will need to see continued evidence to build confidence that inflation is moving down sustainably down toward our goal.”
BTC and ETH’s reaction to the statement underscores investors’ cautious approach to the market. Assuming Powell had hinted about rate cuts, prices would have jumped.
No party for BTC and ETH
On the daily BTC/USD timeframe, the On Balance Volume (OBV) fell. The decline shown by the indicator reflects investors’ cautious approach toward Bitcoin.
If the OBV continues to fall, then BTC might drop 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 BTC’s price. This position suggests consolidation in the meantime.
As such, BTC might continue trading within a range of $41.826 and $43,217.
Source: TradingView
A look at the Relative Strength Index (RSI) confirmed the sentiment that Bitcoin might continue moving sideways. But if the RSI rises above 50.00, the coin might make attempts at reaching $44,000.
However, signals from other indicators showed that the potential looked gloomy.
ETH’s price movement was similar to Bitcoin’s. At press time, the Accumulation/Distribution (A/D) indicator suggested that participants had slowed down on buying ETH.
But this does not imply that the altcoin was undergoing severe distribution.
Read Bitcoin’s [BTC] Price Prediction 2023-2024
Like BTC, the RSI on ETH’s daily chart confirmed a lack of buy orders. In a highly bullish situation, ETH might move back above $2,300.
If interest rates do not drop by March, the coin’s price might go lower.
Source: TradingView
