First Mover Asia: Bitcoin Falls Below $44K After Fed Minutes Release

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Good morning. Here’s what’s happening:

Market moves: Bitcoin slipped to below $44,000 after Fed minutes release, altcoins followed.

Technician’s take: BTC broke below $45K support intraday; short-term oversold indicators intact.

Catch the latest episodes of CoinDesk TV for insightful interviews with crypto industry leaders and analysis.

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Prices

Bitcoin (BTC) $43,423 -5.87%

Ether (ETH) $3,528 -7.4%

Markets

S&P 500: 4,700 -1.94%

DJIA: 36,407 -1.07%

Nasdaq: 15.100 -3.34%

Gold: $1,810 -0.19%

Market Moves

Bitcoin fell below $44,000, after a Federal Reserve official in the U.S. implied a high level of discomfort with high inflation during their meeting in December, according to minutes of the meeting that were released on Wednesday.

At the time of writing, bitcoin, the oldest cryptocurrency, was trading at $43,423, down by 5.87% in the past 24 hours, according to CoinDesk Data.

Data from TradingView and Coinbase shows that right after minutes were released at 19:00 UTC on Wednesday, bitcoin fell 2.73% to $44,500 on the hourly chart.

“Participants generally noted that, given their individual outlooks for the economy, the labor market, and inflation, it may become warranted to increase the federal funds rate sooner or at a faster pace than participants had earlier anticipated,” according to the Dec. 14-15 meeting minutes. “Some participants also noted that it could be appropriate to begin to reduce the size of the Federal Reserve’s balance sheet relatively soon after beginning to raise the federal funds rate.”

As CoinDesk reported previously, bitcoin and traditional risk assets would potentially face price pressure if the minutes signal an internal debate on raising rates and starting the balance sheet contraction along with the end of asset purchases in March.

Even though bitcoin is viewed by some as a hedge against inflation, it is also an emerging technology thus is sensitive to a tightened monetary policy – similar to the tech-heavy Nasdaq index.

S&P 500 and Nasdaq both slipped after the Fed minutes release, while treasuries also sold off as yields on 10-year Treasuries rose.

Other cryptocurrencies also followed the sell-off. Ether was down by 2.51% to $3,644.44 in the hour after the minutes release, based on the hourly chart on TradingView. The loss came after the No. 2 cryptocurrency by market capitalization went to as high as near $3,900 during early U.S. trading hours on Wednesday.

Technician’s take

Bitcoin below $45K Support

BTC has broken below $45,000, which was the bottom of a month-long price range. It remains to be seen if buyers will enter on the dip given persistent oversold signals on the daily chart.

For now, upside momentum continues to slow, which means short-term buying could be limited below $50,000. There is strong resistance ahead, which defined a downtrend from the November all-time high around $69,000. Sellers remain in control.

Lower support is seen around $40,000-$42,000 around the Dec. 5 crash low.

CoinDesk TV

In case you missed it, here are the most recent episodes of “First Mover” on CoinDesk TV:

Risk and Opportunity for Algorithmic Stablecoin, The Case for BlockbusterDAO

“First Mover” hosts spoke to Harvard Business School Professor of Business Administration Marco Di Maggio about the risk and opportunity for algorithmic stablecoin. Seth Ginns, CoinFund managing partner and head of Liquid Investments, analyzed crypto markets. Plus, taking a page from ConstitutionDao, will BlockbusterDAO succeed in its mission? Tasafila, founder of BlockbusterDAO, shared insights into the movement.

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