Bitcoin fell below $19,000 on Wednesday as markets braced for a 100 basis point interest rate hike from the US central bank. Although inflation remains at 0.75%, some believe that inflation will remain at historically high levels, with a 1.00% increase on the cards. Ethereum traded lower on the news, trading above $1,300.
Bitcoin (BTC) earlier fell below $19,000 as traders began preparing for today’s Federal Open Market Committee (FOMC) meeting.
Market uncertainty remains rife as speculation grows that the Fed could go as far as raising rates by 100 basis points.
As a result, BTC/USD dropped to $18,813.46 from a high of $19,600 a day earlier.
Looking at the chart, this latest drop pushed the 10-day (red) moving average to the brink of a downward cross with its 25-day (blue) counterpart.
If this happens, we could see Bitcoin not only slip below $19,000, but also drop below $18,000 for the first time since June.
The token is trading at $19,153.66 as of writing, with prices consolidating ahead of this afternoon’s announcement.
Ethereum (ETH) was also strengthening on the hump day, with the token trading just above $1,300.
Following Tuesday’s high of $1,378.68, ETH/USD moved to an intraday low of $1,319.20, as sentiment in crypto markets remained weak.
Traders have been speculative in recent days, choosing to lighten positions as opposed to holding long ahead of the price hike.
An increase in uncertainty also came from a rally in the 14-day relative strength index (RSI), as the index hit a resistance point.
As of this writing, the index is tracking at 38.43, which is slightly below the 39.00 ceiling, which is currently the main obstacle preventing the price from going higher.
Although there is a lot of fear in the market, if we see the above-mentioned ceiling leak, ETH bulls can enter the market again, and try to take the price above $1,400.
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Will the Federal Reserve decide to raise rates by 0.75% or 1.00% today? Leave your thoughts in the comments below.
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