Depreciation before the US Federal Reserve meeting: an overview of the cryptocurrency market

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Opinion

Investors are excitedmeeting of the US Federal Reserve System, which will take place on July 25-26. It is expected that the interest rate will be raised. And this is not the most favorable signal for crypto enthusiasts.

Bitcoin

The week has passed for Bitcoin in the red. The fall was 1.6%. At the same time, trading during the week was accompanied by relatively small volumes compared to the growth period of June 15-23.

Source: tradingview.com

A slight decline this week can be explained by the expectation of a decision by the American equivalent of the central bank on the key rate. 

In addition, legislators continue to tighten the screws. On Thursday, Congress began considering 
document of 212 pages, whichcalled “Financial Innovation and Technology for the 21st Century Act.” The document introduces new concepts in relation to cryptocurrency, and also determines the mandatory registration of crypto exchanges and other intermediaries with both the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

From a technical analysis point of view, Bitcoin is alreadythe month is flat, not showing much volatility. The upper limit of $31 800 is the resistance level, and the lower limit of $29 500 is the support level.

Source: tradingview.com

The Fear and Greed Index moved to
neutral zone. It is 50, which is 10 points lower than the value a week ago.

Ethereum

The week for Ethereum went the same way as forBitcoin is in the red. The drop was about 2.3%. Only two of the seven days showed an increase. Ethereum failed to gain a foothold above $2,000; its price fell below $1,900.

Source: tradingview.com

Despite the fact that the week turned out to be neutral,Even with a slight negative connotation, many continue to believe in the rise of the world’s second largest cryptocurrency by capitalization. Analysts at Blofin presented to the public three scenarios for what the price of Ethereum will be in 2024.

According to experts, the cost will beinfluence the following factors: network profitability, the upcoming Cancun update, investor expectations based on the ratio of cryptocurrency price to income. According to the optimistic scenario, by the beginning of 2024, ether will cost $5 300, and by the end of the first quarter $9 700. Under the neutral scenario, the figures will be $2 150 and $3 200, respectively. According to the pessimistic 
the price of ether is estimated to be $2 050 at the beginning of 2024 and $2 700 at the end of the first quarter.

As can be seen from the above data, even in the mostIn the worst case scenario, Ether should rise by more than 8% compared to the current price. And in the best case scenario, the growth will be more than fivefold.

At the same time, in the short term, Ethereumcan expect a decrease. In particular, this may be due to sales of large players (whales). One of them recently transferred over 61,000 ETH to the Kraken exchange. Before this, the wallet was inactive for eight years. It is likely that the transfer took place for the sake of a sale.

From a technical point of viewanalysis Ethereum is in a narrow range between $1 870 and $1 940, which are the support and resistance levels, respectively. A breakout of one of them can lead to further growth or decline.

 

Source: tradingview.com

Avalanche

For the week from July 14 to July 21, 2023, priceAvalanche fell 4.76%. Almost the entire decline occurred on two days: Sunday, July 16, when the price fell by 3.69% and Tuesday, July 18, when the decline was 4.07%.

Source: tradingview.com

Despite the fact that Avalanche is quite far fromhighs of 2023, shown in February (more than $23), and in June generally dropped to a historical low ($10.5), the platform itself is clearly doing well. In any case, this is what a report published by the Messari analytics platform hints at. It reflects Avalanche's performance in the second quarter of 2023.

The most impressive thing is the increase in profitcompared to the same period in 2022. It was more than 170% in AVAX and more than 150% in dollars. In addition, C-Chain, responsible for smart contracts at Avalanche, is clearly in demand among consumers. The average number of active addresses on it increased by 132.1%, and the average number of transactions per day - by 162.2%. 

Besides,
Avalanche’s Nakamoto coefficient, which reflects the degree of decentralization of the blockchain, turned out to be 31 (currently 25), which is higher than the average in the crypto industry.

According to Avalanche technical analysis locallydecreases. However, globally the trend appears to be upward. From June 10 to July 14, the coin gained more than 50%. A bullish signal is when the price is above the 50-day moving average (indicated in orange). The current support level is $13.7, the resistance level is about $16:

Source: tradingview.com

In other words, cryptocurrencies ended up onthis week in the red. At the same time, the decrease was relatively small. The main reasons for the dynamics are considered to be investors' anticipation of the Fed meeting, as well as the movement of large volumes of cryptocurrency by whales to trading platforms.

This material and the information in it does not constitute individual or other investment advice. The opinion of the editors may not coincide with the opinions of the author, analytical portals and experts.

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