As a seasoned trader with over two decades of experience under my belt, I have seen market fluctuations ranging from the dot-com bubble to the 2008 financial crisis. Today, I find myself analyzing three digital assets – DOT, UNI, and INJ – each presenting unique opportunities and challenges for investors.
The prices of significant cryptocurrencies like Bitcoin, Ethereum, Solana, Ripple, Dogecoin, and Toncoin have been rising recently, as all these digital currencies are currently showing gains or are “in the green.
The crypto market cap is also up over 3%. It is currently at $2.14 trillion, as markets see bullish sentiment build following the Federal Reserve’s announcement of a 50 basis point reduction in interest rates.
Multiple financial experts and observers, including Robert Kiyosaki, the author of Rich Dad Poor Dad, anticipate a significant surge in the value of Bitcoin and other key currencies due to impending rate reductions. Kiyosaki foresees investors shifting towards assets like Bitcoin, gold, and silver as interest rates decrease, causing their prices to soar dramatically.
Federal Reserve Cuts Interest Rates By 50 Basis Points
As an analyst, I observed a significant surge in Bitcoin’s value, surpassing the $62,000 mark, following the Federal Reserve’s decision to reduce interest rates by 50 basis points. This marks a notable shift, as it’s been almost four years since we last saw such a rate cut, coming after the Fed’s most intense period of interest rate hikes. In their official statement, the Fed communicated this move in a press release.
The Committee now feels more assured that inflation will consistently reach 2% over time, and they believe the chances of meeting their objectives for employment and inflation are approximately equal. However, the economic future is unpredictable, and the Committee stays alert to potential threats to both aspects of its two-fold mission.
According to the Federal Reserve, it’s predicted that the average key interest rate will decrease to around 4.4% by year-end. Fed Chair Jerome Powell expressed confidence in the health of the U.S. economy, stating that this rate reduction would help maintain its strength. After the rate cut was announced, Bitcoin saw a rise of approximately 1.2%, surpassing $61,000 before dipping again. However, U.S. equities lost all their gains following the Fed’s decision, with the Nasdaq 100 and S&P 500 closing the session down by 0.3%.
Conflicting Views On Rate Cut
As various opinions about the effects of the rate reduction surface, Marc P. Bernegger, co-founder at AltAlpha Digital, anticipates that this move will substantially increase the values of prominent cryptocurrencies like Bitcoin and Ethereum. Bernegger posits that a decrease in interest rates would significantly enhance liquidity, making it easier for investors to invest in riskier assets. Additionally, he suggests that reduced borrowing costs will draw more funds towards digital assets. Historically, lower interest rates have been associated with higher asset prices and improved investor confidence. Bernegger contends that the rate reduction will stimulate demand, push up prices, and foster a more optimistic market outlook.
However, the co-founder of BitMex has provided a counterview, explaining that a rate cut is a bad idea that could increase inflation and strengthen the Japanese Yen. Hayes stated that while rate cuts generally boost liquidity, the current economic climate is different.
“Lowering rates is a bad idea right now because inflation remains an issue in the US.”
He also stated that the rate cut could impact the global financial system, particularly the Japanese Yen and that a narrowing of the interest rate gap between the US and Japan could result in a substantial increase in the Yen’s value and lead to investors backing out of the “Yen carry trades.”
“The second reason is that the interest rate differential between the US and Japan narrows with rate cuts. That could lead to sharp appreciation in the Yen and trigger unwinding of the Yen carry trades.”
SEC Flayed Over Crypto Regulations
A gathering was held between Congress members and crypto representatives to debate the Securities and Exchange Commission’s (SEC) regulatory stance on the cryptocurrency sector. During this discussion, SEC Chair Gary Gensler faced criticism as Congress deliberated over perceived overreach by the commission in its industry regulations. Congressman Ritchie Torres recounted a conversation with Gensler where he challenged him about tokenizing a Pokemon card, suggesting that Gensler’s reaction revealed unease towards any decentralized system. Additionally, Congressman Wiley Nickel expressed his disagreement with Gensler’s approach, arguing that strict regulations are hindering consumers, technological advancements, competitiveness, and the Democratic administration.
Bitcoin (BTC) Price Analysis
After the Federal Reserve declared a reduction of interest rates by 0.5%, Bitcoin (BTC) surpassed $62,000, showing continued support. Looking at the price graph, BTC has displayed a generally bullish trend throughout the week amid significant selling pressure on Wednesday. If this positive momentum carries on, BTC might exceed its 200-day Simple Moving Average (SMA) and settle around $65,000. However, the previous week ended bearishly for BTC, as it dropped below its 50-day SMA on Sunday and closed at $59,165. On Monday, sellers continued to influence the market, causing BTC to decrease by 1.69% and settle slightly above its 20-day SMA at $58,164.
Initially, Bitcoin’s sentiment improved on Tuesday when it bounced back from the 20-day Simple Moving Average (SMA) and surpassed the 50-day SMA, returning to the $60,000 mark and closing at $60.321. However, on Wednesday, Bitcoin encountered intense selling activity, with sellers trying to drive the price beneath the 50-day SMA. This caused a dip to $59,217. Nevertheless, the selling pressure eased as demand resurged due to the 50-day SMA serving as a crucial support level. Consequently, Bitcoin might regain the $60,000 level following a 2.41% rise, ending the day at $61,773.
During this session, Bitcoin surpassed the significant $62,000 threshold as markets experienced a rise after the Federal Reserve declared a rate reduction. If Bitcoin maintains its upward trend, it might exceed the 200-day Simple Moving Average and reach $65,000. Conversely, if the mood shifts, traders may aim to push the price below $60,000. At present, a bullish Moving Average Convergence Divergence (MACD) suggests that buyers are dominating the market.
Ethereum (ETH) Price Analysis
Over the past day, Ethereum has climbed nearly 4%, with optimistic feelings resurfacing in the market, pushing it beyond the significant $2,400 barrier and surpassing a notable resistance level. This week, ETH has generally been on an upward trajectory, as indicated by its price chart, even though it experienced a substantial decline of 4.21% on Sunday to reach $2,318, ending the preceding week on a pessimistic note. On Monday, the pessimism continued as ETH dipped below $2,300 after a drop of 0.95%. However, it bounced back by 2.06% on Tuesday, reclaiming $2,300 and closing at $2,343, thanks to robust support at this level. Buyers even made an attempt to push above the 20-day Simple Moving Average (SMA), but were unable to do so.
On Wednesday, there was a struggle between buyers and sellers, with each trying to dominate the trading session. Initially, sellers aimed to pull ETH down below $2,300, causing the price to dip to as low as $2,280. Yet, swiftly responding buyers stepped in to counter the sellers, sparking increased demand that overpowered the selling pressure, resulting in a 1.36% growth and settling at $2,375.
If buyers continue their current strong push, they might succeed in driving Ethereum (ETH) prices above the $2,500 mark. This increase would suggest that bears are losing ground, indicating a potential change in market sentiment towards ETH. Conversely, sellers will aim to pull down ETH prices below $2,400 and $2,300. If they manage to do so, ETH could potentially fall as low as $2,100.
Solana (SOL) Price Analysis
Solana (SOL) is preparing to test the resistance level of around $140 once more, as purchasing interest intensifies after the Federal Reserve declared a 50 basis point rate reduction. Following this announcement, SOL has been battling to surpass the $140 barrier, encountering persistent resistance at this level. Its most recent attempt to break through was last weekend, but buyers were unable to sustain their effort as SOL fell by 1.41% on Saturday and a subsequent 4.20% on Sunday, causing it to dip below its 20-day moving average and settle at $131. This week has seen Solana experience considerable price fluctuations, with sellers aiming to drive it beneath $130 while buyers strive to maintain it above the support level.
Due to lack of activity on Monday, SOL did not show any price changes. On Tuesday, there was continued volatility as buyers tried to push SOL above its 20-day Simple Moving Average (SMA), but as demand lessened, sellers managed to drive the price back down from a daily high of $135 to $131, marking a minimal increase. On Wednesday, SOL experienced heavy selling pressure and dropped to a low of $127 before rebounding to close at $134, representing a 2.07% rise. In the current trading session, buyers have taken charge, with SOL rising by 3.41%, aiming to surpass $140 and its 50-day SMA.
Should SOL surpass $140 and stabilize, there’s a possibility it might surge towards $150 or even higher in the near future. But if investor sentiment changes and sellers take over, the price could dip back down to around $130. If this support level is broken, it might lead to a decline towards $120 or potentially lower.
Dogecoin (DOGE) Price Analysis
Currently, Dogecoin (DOGE) is slightly under $0.105, with potential buyers aiming to surpass this mark. To achieve a move towards $0.110, they will initially need to overcome substantial resistance first. Over the weekend, DOGE dipped below its 50-day Simple Moving Average (SMA), reflecting an increase in bearish sentiments that resulted in a 2.55% drop to $0.103. The price continued falling on Monday, recording a decline of 3.30%, dropping below $0.100 and the 20-day SMA, settling at $0.099.
At the $0.100 level, Dogecoin (DOGE) has shown robust support and bounced back on Tuesday, surpassing its 20-day Simple Moving Average (SMA) and the $0.100 mark to reach $0.101 with a nearly 2% increase. On Wednesday, despite facing selling pressure, DOGE continued to climb, moving past the 50-day SMA after a 2.17% rise to close at $0.103. In the current trading session, DOGE is up by 1.25%, aiming to break through the resistance at $0.105. If successful, we might witness an uptrend to $0.110. Conversely, if sellers take control, they could drive the price back down to $0.100.
Polkadot (DOT) Price Analysis
After facing growing selling pressure, Polkadot (DOT) bounced back from its support level and surpassed $4.20, but this rally could prove temporary if buyers fail to establish momentum. Initially, DOT had turned bearish following an unsuccessful attempt to surpass $4.50 on Sunday, leading to a decline that brought the token into negative territory after it peaked at $4.56. Sellers then took control, causing the price to dip, and DOT eventually closed at $4.40, marking a 0.90% drop. On Monday, selling pressure escalated further, with DOT falling by 4.55% to $4.20.
As a researcher, I observed that on Tuesday, DOT dipped below its 20-day Simple Moving Average (SMA) to $4.16, dropping by 0.95%. The sellers held sway, driving DOT down to $3.98 on Wednesday as bearish sentiments grew stronger. However, a surge in demand at the support levels allowed buyers to regain control, pushing the price back above $4. Currently, DOT is slightly up in today’s session, aiming to break above the 20-day SMA. If successful, we might see another push towards $4.50. Conversely, if sellers reassert their dominance, DOT could slide back to its support level and bounce back as investors take advantage of the dip.
Uniswap (UNI) Price Analysis
Over the past few days, Uniswap (UNI) has been unable to surpass $7 due to persistent selling pressure that has consistently blocked any attempts by buyers to break above this resistance level. On Friday, UNI made an effort to move past $7 but eventually ended up at $6.94 following a 2.19% increase. Over the weekend, sellers gained control, causing UNI to drop nearly 4% on Saturday and another 1.95% on Sunday, leaving it at $6.53. The downward trend continued on Monday as sellers pushed UNI down by 1.80%, bringing its price to $6.42. However, the situation improved on Tuesday due to the 50-day Simple Moving Average (SMA) acting as a support level and increased demand as UNI approached its support level, attracting buyers.
Following its rebound, I observed UNI surging nearly 6%, settling at $6.78 yesterday. Intriguingly, buyers tried to drive the price above $7, pushing UNI to a day’s high of $7.13. Yet, demand waned at higher levels, giving way for sellers to regain control, causing UNI to dip below $7. On Wednesday, it was the sellers who managed to push the price down to a low of $6.41. However, as the support level re-emerged, buyers stepped in and lifted the price back up. By the end of the session, UNI experienced only a minimal decrease, closing at $6.77. Currently, the battle between buyers and sellers continues, with neither managing to assert dominance fully.
Injective (INJ) Price Analysis
During today’s trading, Injective (INJ) experienced a nearly 10% increase and surpassed $20. This surge was driven by growing optimism after INJ hit a low of $17.81 on Monday. The week started with INJ trending downward as it fell beneath its 50-day Simple Moving Average (SMA) on Monday, following a 3.54% drop that ended at $18.02. However, the 20-day SMA provided support, allowing INJ to stage a significant comeback, rising by over 8% and reclaiming its position above the 50-day SMA, settling at $19.50. Attempts were made by buyers to push INJ above $20, as indicated in the price chart, but they failed.
On Wednesday, sellers aimed to pull INJ down below its 50-day Simple Moving Average, which dipped to a daily low of $18.18. But increased demand at lower prices helped INJ bounce back swiftly. The stock closed the day at $19.78, representing a 1.48% rise. Currently, in the ongoing session, INJ is almost 4% higher and has surpassed the $20 mark. Buyers aim to maintain INJ above $20 and strive for further growth towards $25. Meanwhile, sellers will try to push the price back under $20.
Read More
Sorry. No data so far.
2024-09-19 13:03