Data suggests the crypto market could be witnessing another sell-off
The crypto market saw significant declines over the past 10 days, with medium and long-term expectations hit hard. First, a market-wide selloff led by whales and miners saw Bitcoin and Ethereum prices dip below $21,000 and $1,550. Then Fed Chair Jerome Powell’s hawkish stance on Bitcoin and Ethereum pushed prices even lower. Data suggests that the crypto market is likely to witness another sell-off amid a possible 75 bps interest rate hike in September and bearish futures.
Another crypto market sell-off in September
The crypto market has become more bearish as the top cryptocurrencies, Bitcoin and Ethereum, continue to fall below key psychological levels. Wall Street banks including Bank of America, Goldman Sachs and UBS expect a rate hike of at least 100 bps by the end of the year.
Wall Street experts are predicting a rate hike of 50 or 75 bps in September and 25-25 bps hikes in November and December. While central bank governor Jerome Powell confirms sharp rate hikes to curb inflation, he also confirms slow rate hikes under favorable conditions.
According to CME’s FedWatch Tool, a rate hike of 75 bps in September has a 66.5% probability, and a rate hike of 50 bps has only a 33.5% probability.
Investors now have bearish sentiment as medium and long-term expectations are negative. The BTC and ETH options and futures are bearish as the end of September could witness billions in liquidations.
However, a sharp interest rate increase in September will most likely depend on the CPI data on September 13, when the Fed expects a decline in commodity prices.
Another bearish factor
The crypto market may witness several bearish factors pushing prices down. However, the dormant bitcoins movement after several years is an important bearish signal.
5000 BTC dormant for 7-10 years was sold in a single block. That is potentially important in terms of market timing as the crypto market continues to decline. Previously dormant bitcoin moves this year were followed by a downturn. Thus, the crypto market may witness further decline in September and crypto prices may retest the July lows.
The content presented may include the author’s personal opinion and is subject to market conditions. Do market research before investing in cryptocurrencies. The author or publication has no responsibility for your personal financial loss.
