FOMC Meeting Minute Anxiety Leaves BTC and ETH Under Pressure

Key Insights:

• Bitcoin (BTC) and Ethereum (ETH) continue to struggle, with BTC at sub-$24,000 and ETH at sub-$1,900.
• US economic indicators failed to provide support, with investor apprehension ahead of today’s FOMC meeting minutes release pressuring the crypto market.
• Today’s minutes will drive volatility and direction for the coming weeks, with hawkish minutes likely to give BTC a look at sub-$20,000.

On Tuesday, bitcoin (BTC) and Ethereum (ETH) responded to the resurfacing of recession jitters.

Economic indicators from China set the tone at the start of the week. The deterioration in risk sentiment caught the crypto market by surprise. US non-farm payrolls (NFP) and service sector PMI numbers had provided relief before the China numbers.

Today, the US economy was back in focus ahead of the FOMC meeting minutes due late in the session. US retail sales disappointed, weighing on riskier assets going into the US session.

We can expect plenty of crypto market sensitivity toward today’s FOMC meeting minutes. The markets will want guidance following the NFP numbers and steady growth across the services sector amidst softening inflationary pressure.

Since the CPI numbers, consumption woes have added further downside pressure to crude oil prices, another positive from an inflation perspective but negative from an outlook perspective.

Going into the US session, the NASDAQ 100 was down 1.17%, while WTI crude oil was up 0.24%. Crypto correlation with the NASDAQ 100 will likely remain tight, with investor focus on the FOMC minutes.

Hawkish chatter will weigh on BTC and ETH and overshadow any ETH Merge updates. For the broader crypto market, a BTC return to sub-$23,000 could lead to a momentum-driven sell-off before the market stabilizes.

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 1.97% to $23,386.

A mixed morning saw BTC strike an early high of $24,440 before sliding to a low of $23,328. The choppy session saw BTC move through R1 ($24,167) before falling through S1 ($23,612) to test S2 ($23,368).

Technical Indicators

BTC needs to move through S1 ($23,612) and the $23,823 pivot to retarget the First Major Resistance Level (R1) at $24,167.

However, BTC would need dovish FOMC meeting minutes to support a BTC rebound and a return to $24,000.

An extended crypto rally would see BTC test the Second Major Resistance Level (R2) at $24,478 and resistance at $25,000. The Third Major Resistance Level (R3) sits at $25,033.

Failure to move through S1 and the pivot would leave the Second Major Support Level (S2) at $23,368 in play. Barring an extended sell-off, BTC should steer clear of sub-$23,000 and the Third Major Support Level (S3) at $22,813.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. This morning, bitcoin sat below the 100-day EMA, currently at $23,664.

The 50-day EMA narrowed to the 100-day EMA, with the 100-day EMA closing in on the 200-day EMA, delivering bearish price signals.

A BTC move through S1 ($23,612) and the 100-day EMA ($23,664) would support a run at the 50-day EMA ($23,960) to bring R1 into view.

However, a fall through the 200-day EMA ($23,245) would likely see BTC test support at $23,000 and S3 ($22,813) before any recovery.

Ethereum (ETH) Price Action

At the time of writing, ETH was down 2.26% to $1,834.

Tracking the broader market, ETH rose to an early high of $1,958 before falling to a low of $1,819. ETH broke through R1 ($1,911) to test R2 ($1,945) before a slide through S1 ($1,848) to test support at S2 ($1,819).

Technical Indicators

ETH needs to move through S1 ($1,848) and the $1,882 pivot to retarget the First Major Resistance Level (R1) at $1,911.

However, ETH would also need dovish FOMC meeting minutes and positive Merge updates to support a rebound.

An extended crypto rally would see ETH test the Second Major Resistance Level (R2) at $1,945 and resistance at $1,950. The Third Major Resistance Level (R3) sits at $2,008.

Failure to move through S1 and the pivot would leave the Second Major Support Level (S2) at $1,819 in play. Barring an extended sell-off, ETH should steer clear of sub-$1,800 and the Third Major Support Level (S3) at $1,756.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. This afternoon, Ethereum sat above the 100-day EMA, currently at $1,798.

The 50-day EMA narrowed to the 100-day EMA, while the 100-day EMA widened from the 200-day EMA to deliver mixed signals.

A move through the 50-day EMA ($1,837) would support a return to $1,900 to bring the resistance levels back into play.

However, a fall through S2 ($1,819) and the 100-day EMA ($1,798) would leave S3 ($1,756) in play.