On Wednesday, we will know the minutes of the FOMC meeting! What will the market do?
Bitcoin rose by more than $ 2,300 between September 21 and October 4 this year, thus returning to the region of previously defeated support (now resistance) of $ 20,650 and measuring a 50% Fibonacci retracement from an earlier downturn.
A supply reaction appeared a few days ago in the area of this resistance, which could drive a further depreciation towards USD 18,500.
An essential event for the cryptocurrency market may be the publication of the minutes of the last FOMC meeting scheduled for next Wednesday (October 12), during which, apart from the third consecutive interest rate hike by 75 bp, the Federal Reserve also revised the interest rate path upwards.
Let us recall that although the Fed recently expected the federal funds rate to increase to a maximum of 3.8%, it is currently estimated that the peak level will be 4.6%.
It means that the Fed will make two more hikes in November and December, and at least the first of them (and perhaps both) may also amount to 75 bp in the whole cryptocurrency market.
Another event that may affect the Bitcoin quotations will be the publication of the report on CPI inflation in the US, scheduled for next Thursday (October 13). It is worth recalling that the previous publication of this report contributed to the decline in BTC by 10%.
Economists estimate that the dynamics of consumer price growth slowed down in September to 8.1% from 8.3% reported in August. Similarly to a month ago, it seems that any reading above the forecast could contribute to a further decline in BTC quotes.
One can also risk the statement that a reading consistent with the market consensus may also contribute to the depreciation of BTC. It seems unlikely that inflation will drop by only 0.2 percentage points and could change the approach of the Federal Reserve to the subject of monetary policy tightening.
Ethereum fell by almost 32% between September 11 and 21, 2022, beating technical support of $ 1,425. This sell-off only stopped in the area of the following support of USD 1,245, were on September 22 this year, there was a slight demand reaction.
Since then, this cryptocurrency has been moving horizontally between support in the $ 1,245 region and resistance of $ 1,425. Given that this is a form of a temporary rebound after previous declines and that the upper bound of this system coincides with the measurement of the 38.2% Fibonacci retracement from an earlier downward move, it seems highly probable that after the end of this correction, ETH will return on a downward path and will slide to the region of $ 1,000, or even further to $ 800.
It is worth mentioning here, however, that there is no rule for how long a market can remain in consolidation. So it can be estimated that if Wednesday's FOMC minutes and Thursday's report on US CPI inflation do not contribute to breaking out of this deal, the ETH rate will remain within the consolidation even until November 2, when the next Federal Reserve meeting will take place.
Bitcoin Cash (BCH)
Bitcoin Cash has been running since mid-August this year in the horizontal trend between the support of $ 112 and the resistance in the region of $ 133. It is noteworthy that there was a second, smaller one within this consolidation, which we have been observing since mid-September this year.
Both consolidations have two things in common:
I) the lower bounds of $ 112
II) the fact that they are corrective patterns after previous declines.
This also makes it statistically more likely that after the end of this trend, the BCH exchange rate will break down from it, slipping below $ 112, which in turn could naturally drive a further depreciation towards $ 97.
Litecoin fell by more than 25% from over $ 67 between September 13 and September 19 all the way to $ 51, where there was a slight demand response in the second half of September.
However, the subsequent increases did not last too long, as a result of which the LTC rate stuck in a horizontal trend between support at $ 51 and resistance in the region of $ 55.50.
Suppose it is confirmed that this consolidation is only a form of correction after previous declines, and the market breaks down from it. In that case, we could expect further depreciation towards USD 47 or even USD 42.
Solana's quotations fell between August 13 and 29 this year almost 38%, from over $ 48 to the region of $ 30. Since then, they have remained in a horizontal trend between the support of $ 30 and the resistance in the region of $ 37.50. It is also worth noting that the upper bound of this system coincides with the measurement of the 38.2% Fibonacci retracement from the earlier downward move.
So if the course of SOL will break from the current system to the bottom, then we could expect its further depreciation towards the June lows, i.e. USD 26.
The quotations of the Avalanche cryptocurrency fell between September 12 and 18 this year by almost 26%. Since then, the cryptocurrency has remained in a horizontal trend between a support of $ 16.50 and resistance of $ 18.00.
Considering that a current formation is a form of correction after previous declines, statistically, there is a greater probability that the market will eventually try to break out of it with the bottom, which, if successful, could drive a further depreciation towards USD 14.50.
Looking at the EOS quotes, we notice that, in line with our last week's projection, the cryptocurrency rate has recently broken down from the consolidation that has been ongoing since the second half of September.
As mentioned a week ago, a drop below technical support of $ 1.15 naturally opened the door to a further depreciation towards $ 1.04 or even to $ 0.88.
So it seems that we will see a further sell-off of the EOS in the near future.
Chainlink rebounded a few days ago from technical resistance of $ 8.10. If the declines have occurred since then, we could expect to re-test the upward trend line around USD 6.60 in the near future.
It is worth noting that this line has already been tested six times, which means that it is significant support in the area where we could again expect the emergence of greater demand pressure.