For the third consecutive day, the Federal Reserve hiked interest rates by 75 basis points (0.75 percentage point) on September 21.
Broader financial markets fell immediately after the announcement as share prices plummeted.
🟢Before Powell🟢 vs. 🔴After Powell🔴 pic.twitter.com/1QwlBvAPgR
— unusual_whales (@unusual_whales) September 21, 2022
Not to forget, the cryptocurrency market was also affected. After the radical move, the price of the leading coin, Bitcoin, surged [BTC], immediately slipped below the $19,000 price range, after which it recovered slightly.
Not over yet
According to data from CoinMarketCap, the price per BTC is up about 5% since slipping below $19,000 on Wednesday (September 21). At press time, the coin was changing hands for $19,342.38.
Despite appearing to be on an uptrend, reports from cryptocurrency analysis platform CryotoQuant suggest the king coin has more trouble ahead.
According to CryptoQuant, the past few weeks have been marked by a spike in BTC inflows to exchanges. It is trivial that a rally in this metric is an indication of an increase in near-term selling pressure on an asset. As confirmed by CryptoQuant, this growth in BTC inflow to exchanges has put “selling pressure” on the largest cryptocurrency.
Additionally, the cryptocurrency analysis platform noted that BTC’s hourly funding rates were significantly negative. According to them, this was another indication that BTC traders in the derivatives markets were poised to sell short.
CryptoQuant analyst TariqDabil, which is still trading at the $19,000 price level and suffering an 11% drop in trading volume since the Fed’s announcement on Wednesday, opined that investors may have to wait for a significant price rally for the leading coin will be listed for a little longer. According to Dabil, the leading coin “still needs time to recover.”
Before you buy the dip
A look at BTC’s Adjusted Output Profit Ratio (ASOPR) showed that the current bear cycle (which has lasted over 185 days) has so far been characterized by many BTC investors selling at a loss.
According to CryptoQuant analyst IT Tech, ASOPR has acted as resistance in previous bear cycles. Whenever BTC’s price rose and the ASOPR recorded a reading of one (suggesting more investors were selling at a profit), a “rather strong rejection” usually followed.
IT Tech noted that ASOPR has acted as a significant resistance for BTC in the current bear market. As a result, strong rejection could ensue when the ASOPR finally registers a value of one.