Here is why a 0.75% Fed rate hike could be bullish for Bitcoin and altcoins
The S&P 500 and the Nasdaq Composite index suffered their worst weekly performance since June as investors remain concerned that the Federal Reserve will have to continue with its aggressive monetary policy to curb inflation and that could lead to a recession in the United States.
Bitcoin (BTC) remains closely correlated to the S&P 500 and is on track to fall more than 9% this week. If this correlation continues, it could bring more pain to the cryptocurrency markets because Goldman Sachs strategist Sharon Bell cautioned that aggressive rate hikes could trigger a 26% fall in the S&P 500.
The majority expect the Fed to hike rates by 75 basis points in the next meeting on Sept. 20 to Sept. 21 but the FedWatch Tool shows an 18% probability of a 100 basis point rate hike. This uncertainty could keep traders on the edge, resulting in heightened short-term volatility.
If the Fed’s rate hike is in line with market expectations, select cryptocurrencies could attract buyers. Let’s study the charts of five cryptocurrencies that are positive in the near term.
Bitcoin recovered from $19,320 on Sept. 16 and rallied above $20,000 on Sept. 17 but the bulls are struggling to sustain the higher levels. This suggests that bears are active at higher levels.
The 20-day exponential moving average ($20,432) has turned down gradually and the relative strength index (RSI) is in the negative zone, suggesting that the sentiment remains negative and traders are selling near overhead resistance levels.
If the price continues lower and breaks below $19,320, the BTC/USDT pair could decline to $18,510. Buyers are expected to defend this level with vigor.
On the upside, the 50-day simple moving average ($21,605) is the key level to keep an eye on. If bulls
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