Is this not the end of Bitcoin declines? Will it drop below $ 20k?
In line with market expectations, the Federal Open Market Operations Committee (FOMC) decided to raise the federal funds rate by another 75 basis points during its November meeting. It is noteworthy that it was the fourth such significant increase in interest rates in a row and the sixth since March this year, proving a monetary policy tightening cycle.
Although this decision contributed to the decline in the price of many cryptocurrencies, including Bitcoin, the sell-off observed in the virtual assets market was smaller than that experienced by the US stock market.
Considering the expectations that the Fed will reduce the scale of its tightening already during the December meeting, it seems more and more likely that the cryptocurrency winter observed since November 2021 is slowly coming to an end.
Investors are currently valuing a 56.8 % chance of an interest rate hike only by 50 bp during the December meeting and a 43.2 % chance for a fifth consecutive interest rate hike by 75 bp.
Therefore, it is currently expected that after four consecutive interest rate hikes by 75 bp, the Fed will make two increases of 50 bp in December 2022 and February 2023. each, and then in March, it will raise the federal funds rate only by 25 bp. to 5.00-5.25%, which would be the target for the current tightening cycle. For the following months, interest rates will probably remain unchanged, and perhaps they will be cut for the first time at the end of next year.
It, therefore, seems that the current tightening cycle, which was one of the main catalysts for the nearly a year's sell-off in the cryptocurrency market through a reduction in liquidity, is slowly coming to an end, increasing the chances of a rebound and return of this market to the growth path.
Before this happens, however, Bitcoin's quotations could fall back to the local line of the upward trend, which is the lower limit observed since the second half of September this year. Parallel growth channel formation, or even up to $ 18,500.
This is supported by the supply reaction that appeared on Sunday after the BTC rate reached the upper limit of the channel.
However, if nothing unexpected happens in the global economy, it seems less and less likely that the BTC price will drop below 18,000. USD.
Ethereum has been trading inside a highly tight parallel growth channel formation for several days. There are many indications that this system is only a form of a temporary rebound before the next upward impulse towards USD 1,780 or even USD 2,000.
However, it is possible that before these increases occur, the ETH rate will first slide to the area of recently defeated resistance (now support), located around USD 1,425 and USD 1,380, respectively.
It is worth noting that both of these levels coincide with significant Fibonacci measures - the first with 50% and the second with 61.8% of the range of the previous upward movement - which increases the probability that even if the price of this cryptocurrency slides to them, then there could be a greater demand pressure, which would initiate another upward rebound.
Litecoin prices proved resistant to the Fed's monetary policy, as a result of which they have recently increased by over 51%, breaking several significant resistance levels and reaching the region of USD 73, which is the highest level since May this year.
If there is more supply pressure around the currently tested level, the LTC could slide to any of the recently breached levels, i.e. to $ 64.50 or $ 57.
The dynamics of the last upward movement may, however, indicate that this is a new impulse, which is more likely that a possible downward movement will turn out to be only a form of correction, after which the quotations of this cryptocurrency will return to the upward path.
A permanent break above USD 73.50 could open the door for further appreciation towards another resistance located at USD 96.
In line with last week's projection, Solana's stock has risen 44% over the past few days, hitting a technical resistance of $ 37.50.
As we assumed, there was a slight supply reaction around this level, which formed a pro-bearish engulfing system, signalling a potential rejection of the resistance mentioned, which in turn could naturally drive a downward move towards USD 27 in the near future.
The Polygon (MATIC) cryptocurrency exchange rate has recently surged, overcoming the essential technical resistance of USD 1.03 and reaching USD 1.30 last Saturday, the highest level since April this year.
Such a strong appreciation increases the risk of a corrective downward rebound in ki in the near future$ by 1.03 or even $ 0.95.
However, it seems highly probable that even if such declines appear here, they will ultimately turn out to be only a form of correction, after which the MATIC price will return to the upward path.
A permanent break above $ 1.33 could, in turn, drive a further upward rally towards another resistance around $ 1.70.
The XRP rate has been maintained since this year's second half of September in the horizontal trend between the support in the region of USD 0.44 and the resistance around USD 0.54. It seems highly probable that this trend will continue over the next few days and perhaps even weeks. No rule determines the moment of breaking out of consolidation.
However, taking into account that this pattern is usually only a correction, from which the market breaks in the direction consistent with the earlier move, it seems more and more likely that the XRP rate will eventually break out of this formation, which in turn could drive further appreciation.
Binance Coin (BNB)
Looking at the Binance Coin quotes, we will notice that the price of this cryptocurrency has increased by over 40% over the past few days, thus returning to the area of previously defeated support (now resistance) of $ 355.
Around this resistance, a supply reaction appeared last weekend, as a result of which we are now observing a re-test of the recently defeated resistance (now support) in the amount of $ 330.
If the BNB price drops below the currently tested level, it should soon be prepared for further depreciation towards USD 297.
Cardano's quotations have recently returned to the area of the previously defeated upward trend line, which is the lower boundary of the earlier isosceles triangle, from which the cryptocurrency exchange rate was already knocked down at the beginning of October this year.
If the Cardado exchange rate rebounds from the resistance being tested in the near future, we could expect it to depreciate again to around USD 0.3850 or even USD 0.33.