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

005, Jan 2022

Good morning. Here’s what’s happening:

The 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.

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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 minute's 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. Continue reading on Coindesk.