Cryptocurrency market on July 28: FED raises interest rates, Bitcoin and Altcoins recover well

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2022-07-29 01:44:45

The day after the Fed announced the decision to raise interest rates by 0.75 basis points, the cryptocurrency market had positive reactions.

Cryptocurrency Market

Market data shows that Bitcoin established a local top near $23,100, then turned slightly lower and closed on a daily basis at $22,952.

Bitcoin price chart July 28, 2022

Previously, BTC dropped below the $21,000 mark at the start of the week, adding to the anxiety of investors who were wary of bad news from the US Federal Reserve. Immediately after the Fed announced an interest rate increase of 0.75 points, lower than the forecast of experts, Bitcoin price turned to rise sharply, surpassing the $23,000 mark. However, the bulls were unable to continue pushing the price higher and started to show signs of a slight correction. Currently BTC is trading around the $22,700 threshold.

Many analysts warn that even Bitcoin’s recent rallies to multi-week highs have not been enough to change its overall downtrend. According to on-chain data monitoring company, Whalemap:

“Bitcoin’s recent rejection of $24,000 is not a good sign, as neither TA nor on-chain volume records view this level as resistance.”

A chart of actual price by address — which analyzes the price at which different groups of BTC last moved — shows the relative absence of resistance at Bitcoin’s $24,280 local top.

Top 10 cryptocurrencies on July 28, 2022 also have a good recovery momentum

While Bitcoin rallied strongly, the altcoin market also had a rally in the green. Many tokens have strong growth momentum with impressive double-digit gains. Leading the increase was Lido DAO (LDO) when it recorded a profit of up to 35.1% in the past 24 hours. This rally benefited from the news that the project management team had updated its proposal to sell 1% of the total LDO supply to the investment fund Dragonfly Capital with a market price between 1.45 USD and 2.45 USD, as well as imposing required to lock the token for 1 year – the reason why the old proposal failed. Therefore, many people are pushing the price of LDO up to make Dragonfly spend more money.

It is followed by Bitcoin Gold (BTG) with a gain of 30%. Ethereum Classic (ETC), Synthetix (SNX), Uniswap (UNI) also surged with more than 20% compared to yesterday.

Ethereum (ETH) also has a strong rally of more than 11% within 24 hours. After bottoming at $1,420 yesterday, ETH followed BTC’s lead, rallying more than $200, successfully recapturing the $1,500 and $1,600 price zones. Currently, Ethereum price is trading around $1,614. The other major cryptocurrencies in the top 10 by market capitalization all saw good gains of 6-20%. The market cap is back above the $1 trillion mark and is currently worth $1.045 billion.

Cryptocurrency Market FGI Index July 28, 2022

In the last 12 hours, there were more than 270 million USD of derivative orders on the market being liquidated, led by 3 ETH, BTC and ETC. The percentage of short orders being burned accounted for 78.7%. Investor sentiment in the cryptocurrency market is also recovering positively. The FGI rebounded strongly to 32 points at the Fear zone, much better signal than at the beginning of the week.

Macro factors

At dawn on July 28, the US Federal Reserve (Fed) announced to raise interest rates to a new level of 2.5%, an increase of 0.75% compared to the June adjustment. back to the level of 2018, the time before interest rates were brought close to zero to stimulate investment during the COVID-19 pandemic.

Since the beginning of 2022 until now, the Fed has raised interest rates 4 times in a row in March, May, June and July, with adjustments of 0.25%, 0.5%, and 0 respectively. ,75% and 0.75%. The Fed’s goal will be to bring interest rates to 3% – 3.5% by the end of this year through the remaining adjustments in September, November and December.

This is a move to regulate the market by the Fed in the context that this agency is constantly pumping money into the market to subsidize people and businesses. As a result, inflation is also showing signs of getting out of control.

History of Fed interest rate adjustment from 2006 to present.
Source: CNBC

Inflation in the US, reflected in the consumer price index CPI, in June reached 9.1% – the highest level in the past 4 decades and exceeded all predictions of experts. In the press conference also at dawn this morning, Fed Chairman Jerome Powell provided some more information about the US central bank’s comments, including:

  • Inflation is currently too high, the Fed will continue to adjust the money supply to cope.
  • The June inflation report showed worse-than-expected results.
  • The next rate hike in September will likely see an unusually high correction.
  • The Fed’s target interest rate at the end of this year will be between 3 and 3.5%.
  • The Fed is watching for signs that the US economy may be slowing, but does not think a recession has begun.

Also at this month’s Fed meeting, the US Central Bank stated that Russia is harming the global economy. “The war between Russia and Ukraine is causing enormous human and economic hardship,” said members of the Federal Open Market Committee (FOMC). “Wars and related events are adding upward pressure on inflation and are weighing on global economic activity.

Another macro news is that the US will publish the GDP report tonight – July 28. This indicator will show whether the world’s largest economy is entering a recession when Q1 GDP fell by 1.6%. According to Bloomberg, observers forecast the US GDP in the second quarter will grow slightly by 0.4%.

US stocks also gained at the same time in the trading session on July 27 (US time).

The Dow Jones Industrial Average rose 436 points, or 1.4%, to 32,197, the S&P 500 advanced 2.62% to 4,023 and the Nasdaq Composite jumped 4.06% to 12,032 at the end of Wednesday’s session. the point. Technology stocks led gains a day after second-quarter earnings reports from Alphabet and Microsoft.

Stock markets peaked in the afternoon session as Fed Chairman Jerome Powell left the door open for the move at the central bank’s next meeting in September and noted that the agency would eventually slow down the rate of growth. raise interest rates. Powell said in a press conference that the Fed could raise rates by 0.75 percentage points again in September, but that will depend on economic data.

Investors continue to worry that the central bank’s continued efforts to reduce inflation will tip the economy into a recession, or that the economy could be in a recession right now. . Those concerns were allayed when Powell said he did not believe the economy was currently in a recession with “too many areas of the economy doing very well.”

Technology stocks continued to soar after the general market recovered. Alphabet shares rose 7.7% after posting impressive revenue from Google’s operations. Microsoft shares advanced 6.7% after reporting 40% revenue growth for Azure and cloud services. Meta Platforms stock advanced nearly 6.6%; Amazon and Apple rose more than 5% and 3.4%, respectively. Retail stocks also rose as inflation fears eased yesterday with Walmart surging 3.8%; Kohl’s, Ross Stores and Costco all rose more than 2%.

After the US Federal Reserve (Fed) announced an interest rate increase of 0.75 points, gold prices also turned to rise on Wednesday (July 27). At the end of the session, gold futures rose 0.3% to $1,722 an ounce.

Oil prices also rallied $2 a barrel on Wednesday (July 27) as reports that US inventories fell and Russia cut gas flows to Europe offset concerns about weak demand and the US is about to raise interest rates. Ending the session, Brent oil contract increased 2.13% to 106 USD/barrel. The WTI oil contract added 2.4% to $97 a barrel.

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