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- The Federal Reserve minutes showed that the commissioners are concerned about cutting rates too soon as the inflation has not yet eased as predicted.
- Although Bitcoin has registered heightened demand from ETF fund managers, further tightening of monetary policies in the US could hurt crypto liquidity.
Bitcoin (BTC) price has consistently closed above $50,000 for the past seven days, thus confidently reclaiming $1 trillion in market capitalization. The flagship coin has experienced heightened demand from institutional investors, following the approval of spot Bitcoin exchange-traded funds in the United States earlier last month. However, the spot BTC ETF frenzy is gradually waning, as depicted by the notable decline in non-zero wallets, by more than 729k in the past month.
Nevertheless, Bitcoin’s macro bull cycle is in the early stages and analysts led by PlanB forecast a new all-time high before the end of the year. On Wednesday in a CNBC interview, FundStrat head of research Tom Lee said that Bitcoin could reach as high as $150,000 this year.
FOMC Minutes Signals Possible Hard Times Ahead
The United States Federal Reserve released detailed meeting minutes for the FOMC on Wednesday. Ideally, the Fed is concerned about cutting interest rates too soon as the interest rates show no signs of declining soon. The current Fed rates stand between 5.25 and 5.50 percent.
Previously, the Fed had signaled several rate cuts this year but the recent CPI data depicted that the high inflation is here to stay. Nonetheless, the Fed is not likely to raise interest rates further to avoid straining the economy that has experienced a significant proliferation of illegal immigrants, thus raising the unemployment rate.
Bitcoin Faces Correction
Bitcoin price has in the past week consolidated between $50,600 and $52,800. Although the mother coin has found a solid support level of around $50.6k, the TD Sequential indicator has flashed a sell signal on the 3-day chart. As a result, crypto analyst Ali Martinez believes that Bitcoin price faces a potential 10 percent correction in the near term.
The TD Sequential indicator shows a sell signal on the #Bitcoin 3-day chart. It's important to note that the last two times this indicator signaled bearish, $BTC experienced a 10% price correction!
If you’re planning to join me in this trade, go to @coinexcom, and sign up using… pic.twitter.com/HeHulw5Xni
— Ali (@ali_charts) February 21, 2024
Ethereum Jump Triggers Crypto Cash Rotation
According to market intelligence platform Santiment, the rise of AI-focused altcoins is a signal the altseason will materialize in the coming weeks. Furthermore, the Ethereum network has registered an all-time high in non-zero addresses at more than 114.95 million. Additionally, Ethereum price is currently attempting to rally beyond $3,000 amid the spot Ether ETF frenzy.
Meanwhile, crypto cash rotation from Bitcoin to altcoins has expedited in the past few days. For instance, Binance coin (BNB) has been rallying beyond $380 despite Bitcoin price struggling to continue in a bullish outlook.
Ripple’s XRP Under Siege
Ripple-backed XRP has continued to face a significant resistance level of around 54 cents. The large-cap altcoin faces being left behind the ongoing mass adoption due to the ongoing SEC vs Ripple lawsuit. Nevertheless, Ripple has continued to improve the On-Demand Liquidity (ODL) programs in a bid to ensure a healthy market adoption. According to the latest market data, XRP price has dropped 2 percent in the past seven days to trade around 54 cents on Thursday.
