Major coins traded in negative territory on Wednesday evening as the global cryptocurrency market cap declined 1.8% to $999.6 billion at 9:31 p.m. EDT.
|Cryptocurrency||24-Hour % Change (+/-)||Price|
Why It Matters: Bitcoin, Ethereum, and Dogecoin all were trading lower after the Federal Reserve's latest rate hike caused risk assets, including stocks, to plummet.
The tech-heavy Nasdaq closed 3.4% lower intraday, while S&P 500 ended Wednesday’s session 2.5% down. At the time of writing, U.S. stock futures were flat.
On Wednesday, all 12 Federal Open Market Committee members voted to raise the target fed funds rate by 0.75% to a range of between 3.75% and 4%. This was the fourth straight such rate hike in the U.S. Federal Reserve’s fight against inflation.
Edward Moya, a senior market analyst with OANDA, noted the dovish part of the Fed’s statement, where the central bank said that it will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.
“Bitcoin continues to trade above the $20,000 level as the Fed has confirmed what markets were hoping for; A downshift in tightening is coming. The initial Fed reaction was rather strong for most risky assets, but it was not sustained as the central bank will remain dependent, with the next round of inflation data,” said Moya, in a note seen by Benzinga.
“Inflation has been high for 18 months and the Fed will remain committed to using their tools, which means we won’t get a greenlight for risky assets until inflation is dropping sharply.”
Justin Bennett noted that the dollar index still has “bull flag potential” and is set to close above the 111.80 mark.
“Those wishing for an extended rally from [crypto] need the DXY back below this 111.50-111.80 area in the coming days,” said the trader.
So far, the $DXY bull flag potential still exists, and it's set to close above the 111.80 area.— Justin Bennett (@JustinBennettFX) November 2, 2022
Those wishing for an extended rally from #crypto need the DXY back below this 111.50-111.80 area in the coming days.
113.60 is in play until then. https://t.co/I2WhYnekqW pic.twitter.com/q4iWgR4kld
Dogecoin, which surged over the past week after Elon Musk's Twitter takeover, was seen cooling off on Wednesday evening.
The meme coin’s 24-hour trading volume declined 41.3% to $4.6 billion, according to CoinMarketCap data. At the time of writing, over 24 hours, Coinglass data indicated that $23.8 million worth of DOGE was liquidated.
Serhii Zhdanov, CEO of cryptocurrency trading platform EXMO, said in a note that for almost three-and-a-half days when DOGE traded between 6 and 9 cents, it accounted for 20% of the exchange’s weekly trading volume.
“A sharp jump in price occurred on October 29: DOGE rose by more than 50% in 8 hours. This is the main reason why there was relatively little trading volume between $0.09 and $0.12. The excitement in the market began with an increase above 0.12 USD,” said Zhdanov.
In the second half of the week, trades were mostly between 12 to 15 cents and this period accounted for 57% of the weekly trading volume.
Market intelligence platform, Santiment, noted that Litecoin (LTC) is “currently on a nice run” and decoupled from the cryptocurrency pack.
“We have seen that the amount of addresses with 1,000 or more [LTC] has grown rapidly since mid-June, and [LTC's] price vs. [BTC] has grown +51% since June 12th.
#Litecoin is currently on a nice run, and is temporarily decoupled from the #crypto pack. We have seen that the amount of addresses with 1,000 or more $LTC has grown rapidly since mid-June, and $LTC's price vs. $BTC has grown +51% since June 12th. https://t.co/uFXYNcnsRP pic.twitter.com/PASMdaezCD— Santiment (@santimentfeed) November 3, 2022
Santiment noted that 314 new shark and whale LTC addresses have been created since May 27. At the time of writing, LTC traded 16% higher at $63.80. For the week, the coin has gained 12.9%. It should be noted that LTC and DOGE can be mined together.
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Visit Benzinga's Crypto Homepage - 1,000,000+ depend on Benzinga Crypto every month