Share:
Bitcoin price could fall 5% to $25,357 or breach $27,500 depending on the outcome of the Fed meeting.
Ethereum price is likely to fall 5% if BTC shows weakness, sending ETH for a liquidity grab below the $1,552 support level.
Ripple price must break and close above the mean threshold at $0.5337 or fall 10% retracing the $0.4600 level.
Bitcoin (BTC) price remains bullish ahead of the US Federal Open Market Committee (FOMC) meeting later today. With investors watching the clock, the next directional bias will depend on what the meeting yields. The Fed interest rate decision could inspire volatility for the king of crypto, considering macroeconomic factors have influenced BTC prices across the year.
What is circulating supply?
The developer or creator of each cryptocurrency decides on the total number of tokens that can be minted or issued. Only a certain number of these assets can be minted by mining, staking or other mechanisms. This is defined by the algorithm of the underlying blockchain technology. Since its inception, a total of 19,445,656 BTCs have been mined, which is the circulating supply of Bitcoin. On the other hand, circulating supply can also be decreased via actions such as burning tokens, or mistakenly sending assets to addresses of other incompatible blockchains.
What is market capitalization?
Market capitalization is the result of multiplying the circulating supply of a certain asset by the asset’s current market value. For Bitcoin, the market capitalization at the beginning of August 2023 is above $570 billion, which is the result of the more than 19 million BTC in circulation multiplied by the Bitcoin price around $29,600.
What is trading volume?
Trading volume refers to the total number of tokens for a specific asset that has been transacted or exchanged between buyers and sellers within set trading hours, for example, 24 hours. It is used to gauge market sentiment, this metric combines all volumes on centralized exchanges and decentralized exchanges. Increasing trading volume often denotes the demand for a certain asset as more people are buying and selling the cryptocurrency.
What is funding rate?
Funding rates are a concept designed to encourage traders to take positions and ensure perpetual contract prices match spot markets. It defines a mechanism by exchanges to ensure that future prices and index prices periodic payments regularly converge. When the funding rate is positive, the price of the perpetual contract is higher than the mark price. This means traders who are bullish and have opened long positions pay traders who are in short positions. On the other hand, a negative funding rate means perpetual prices are below the mark price, and hence traders with short positions pay traders who have opened long positions.
Bitcoin (BTC) price is testing the $27,480 hurdle, as investors await the FOMC meeting for the Federal Interest Rate decision. If the Fed raises interest rates or leads with hawkish rhetoric, BTC could react with a downtrend as investors pull out capital from risk assets like Bitcoin. However, should the agency choose not to raise interest rates, BTC could react with a move north.
From a technical standpoint, however, the odds favor the upside. The CME’s FedWatch Tool indicates a 99% chance of a rate pause, tipping the odds further to the upside. The Awesome Oscillator (AO) currently in the positive with huge volumes of green histogram bars. The Relative Strength Index (RSI) is in an overall uptrend, but maintains a paused stance in the hours leading to the announcement.
It is likely that Bitcoin price could extend to tag the supply zone around the $29,000 psychological level before a possible pullback due to selling pressure from this order block. A decisive break and close above its mean threshold at $29,367 would continue the uptrend.
BTC/USDT 1-day chart
However, a rate hike or hawkish rhetoric could see Bitcoin price rejected from the $27,500 level to test the $26,640 support level. If the demand zone fails to hold as a support level, BTC could slump back into the confines of the descending trendline, marked by a breach of the mean threshold at $25,357. This could confirm the downtrend.
Also Read: Bitcoin profitable days shows that in the long run holding is usually a solid strategy
Ethereum (ETH) price could have little to say in as far as its next move is concerned, considering the Proof-of-Stake (PoS) token has been mirroring the price action of Bitcoin for quite some time now, owing to its strong correlation with BTC. If the Fed’s decision comes in as expected, Ethereum price could follow BTC north.
Independently, however, Ethereum price remains bearish, with momentum falling as indicated by the RSI dropping. The AO also remains negative, indicative of dominance by the bears. The immediate support at $1,624 is therefore critical for ETH, as losing it would plunge it back under a confining bearish trendline. The downtrend could go as low as the $1,552 level.
ETH/USDT 1-day chart
Otherwise, if bullish momentum increases, Ethereum price could very well rise above the immediate hurdle at $1,682, then $1,791, with a confirmed daily candlestick close above the $1,900 likely to kickstart an uptrend.
Also Read: Ethereum Layer 2 networks BASE, zkSync Era make history, ETH bites the dust
Ripple (XRP) price is at a crossroads, testing the supply zone at around $0.5174. For a confirmed uptrend, XRP must breach the midline of the supply zone, the mean threshold at $0.5337. A decisive break and close above it will give the bulls solid ground to build on.
Currently, the overall outlook is bullish, with the RSI inclined north and the AO steadily climbing to the positive region. Nevertheless, investors should still wait for confirmation above the aforementioned level.
XRP/USDT 1-day chart
A rejection from the mean threshold, however, could mean the supply zone will hold as a resistance level, with the ensuing selling pressure sending Ripple price toward the foot of the latest uptrend at $0.4600. In the dire case, the downtrend could continue, with the remittance token potentially tagging the May lows at $0.4191.
Also Read: XRP is the next Bitcoin if we solve a multi-trillion-dollar problem, Ripple CEO Brad Garlinghouse
Share:
Cryptos feed
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
