FOMC Recap: Fed hike impact on Bitcoin, Ethereum and Gold
- The Fed raised interest rates by 50bps as expected, following the lower-than-expected Core CPI on Tuesday.
- A hawkish Jerome Powell underscored that inflation was still not under control, while US employment remained strong.
- The market reacted sparsely to the Fed's decision, as the announcement was already discounted.
In its latest meeting, the US Federal Reserve delivered an interest rate rise of 50 basis points to 4.5%. The central bank renewed its commitment to fight inflation and kept increasing interest rates for the sixth straight meeting, despite a lower-than-expected US CPI earlier on Tuesday.
The cryptocurrency markets reacted cautiously to the news and felt little pain as the announcement was mostly priced in. Bitcoin and Ethereum are consolidating at the time of writing after a 7% uptrend rally witnessed earlier in the week. Gold shows bearish interest, but the price remains relatively unfazed.
Bitcoin price stabilizes
Bitcoin price, the peer-to-peer digital currency, currently auctions at 17,925, a 4.1% increase from December 13's opening price. BTC price rose into a key resistant zone but has not displayed enough bearish strength to call the uptrend move over. According to the previous outlook, the next bullish target is $18,962, with an invalidation of the uptrend at $18,880.
Ethereum price up 7%
Ethereum price trades at $1,317, a 5% increase from December 13's opening price. ETH has failed its second attempt to rally past the $1,343 zone, a bullish target zone mentioned earlier in the month. If market conditions persist, ETH may be setting up for a retest of a pierced trend near $1,274. The third attempt at the mid $1,300 zone should be the catalyst to send ETH back into the mid $1,400 zone, a 7 % increase from the current market value.
ETH/USDT 2-Hour Chart
Gold price shows bearish cues
The Gold price has endured the brunt of the Fed's hawkish rate impact as XAU has breached the $1,800 barrier for a 0.6% decline on the day. Bears may be positioning themselves for a continual decline in the days to come. A breach below the $1,781 level could prompt a declining rally toward the $1,720 zone. Traders may consider waiting for more price action to develop as a breach above the recent swing high at $1,824 could propel the yellow metal towards the summertime highs at $1,875. Gold will rise by 4% if the bullish scenario plays out.
XAU/USD 8-Hour Chart
Author
Tony M.
FXStreet Contributor
Tony Montpeirous began investing in cryptocurrencies in 2017. His trading style incorporates Elliot Wave, Auction Market Theory, Fibonacci and price action as the cornerstone of his technical analysis.
