Ethereum Classic price takes a 6% hit as the Fed hikes interest rates by 75 bps

Ethereum Classic price suffered the blow of the Federal Reserve’s decision to increase the interest rates by 0.75% point in order to reduce inflation. While Bitcoin and other top cryptocurrencies did not display much volatility, most of the altcoins noted price drops resulting in a 2.6% decline in the total crypto market capitalization.

Ethereum Classic price testing lows

Etheruem Classic price painted red on the charts on Wednesday, slipping by 6.37% to trade at $22.62. The Ethereum namesake, which was one of the best-performing assets in July, had been testing the 15-month-old downtrend line as support, falling through it in October. However, after reclaiming it towards the end of October, ETC entered an uptrend.

But following the 12% drop over the last week, the Ethereum Classic price is in a downtrend again, testing the downtrend line as support. If ETC falls slides again, $18.17 will be the next critical support level. This event would also initiate a sell-off among investors that made profits or recovered losses post July’s 213% rise.

At the moment, the Parabolic SAR’s black dots are present above the candlesticks, highlighting an active downtrend. However, the Average Directional Index, which indicates the strength of the active trend, is also below the 25.0 threshold. This means Ethereum Classic Price could still recover since the bearish sentiment might not hold well.

Thus, the next target for ETC would be flipping the $25.86 resistance level into support. If the Ethereum Classic price managed to do so, traders and investors would be better off holding on as a further upswing could be possible.

ETC/USD 1-day chart

Moreover, Wednesday’s red candle was extended due to the Fed’s decision more than any individual factors.

Fed takes a hard call

Increasing the interest rates by 75 basis points, the Federal Reserve created history by establishing the largest hike for four consecutive months. However, the Fed is not done yet. According to the Fed Chair, Jerome Powell, inflation will not be coming down and to fight it, the rates will continue to be hiked. 

Although Powell did state that the pace of hikes could slow down by next month but will not stop. As per the Chair, these rates could rise above the 4.5% to 4.75% range suggested previously by the Fed.

The impact of the same on the crypto market could hinder any potential of recovery by year-end.