Market Reaction to Fed's Slower Rate Hike Pace
Following the Federal Reserve's decision to slow the pace of interest rate increases, capital has begun flowing back into the market, triggering a rebound in cryptocurrency prices. While current conditions appear favorable, divergence in capital allocation suggests investors should closely monitor large funds and institutional players. The weekly chart indicates a fragile rebound, with Bitcoin showing signs of weakness.
Bitcoin Price Analysis
- Weekly Chart: Two consecutive weeks of low-volume rebound, facing resistance at the 7-week and 10-week moving averages.
- Daily Chart: Retains rebound potential but remains weak. The 20-day moving average at $16,600** serves as critical support; a breakdown could lead to a retest of **$17,900 resistance.
- 4-Hour Chart: Shows volume-backed topping signals, suggesting a potential short-term decline if $17,100** isn’t breached. The 60-day moving average at **$16,800 acts as a final defense line.
Ethereum Price Analysis
- Weekly Chart: Low-volume rebound meets short-term moving average resistance.
- Daily Chart: Narrow consolidation between $1,210** (support) and **$1,330 (resistance).
- 4-Hour Chart: Weak rebound after testing the 60-day moving average; failure to break $1,275 may lead to further downside.
Bitcoin's November Struggle: Signs of Bottom Formation?
November proved painful for Bitcoin holders, with on-chain data revealing substantial realized losses—a typical precursor to market bottoms. Key metrics:
- Realized Losses (30 Days): $17.85B (lower than LUNA crash’s $26.68B).
- Realized Cap Decline: 17.33%, exceeding previous cycle drawdowns (14.13% in 2015, 16.51% in 2018).
Cycle Comparison: Duration and Indicators
- Price Below Realized Price: 176 days (vs. 134 days in 2018, 384 days in 2014–15).
- MVRV Ratio: 6th percentile historically, indicating extreme undervaluation.
- NUPL Ratio: Confirms "capitulation phase," with only 56% of supply in profit.
👉 Why Bitcoin’s Current Valuation Matters for Long-Term Investors
Macro Risks: The Dollar’s Role in Bitcoin’s Trajectory
Bitcoin’s cheap valuation doesn’t immunize it against macro headwinds:
- Dollar Strength: A surging USD could pressure BTC’s price temporarily.
- Global Liquidity: Tightening cycles historically correlate with crypto downturns.
Key Takeaways for Investors
- Position Sizing: Allocate cautiously amid volatility.
- Time Horizon: Short-term pain may precede long-term gains.
👉 How to Navigate Crypto Market Cycles Like a Pro
FAQ
Q: How long might Bitcoin remain below its realized price?
A: Historical trends suggest 6+ months is possible, but capitulation signals are already evident.
Q: Is Ethereum’s outlook similar to Bitcoin’s?
A: Yes, but ETH’s consolidation range ($1,210–$1,330) offers clearer near-term support/resistance levels.
Q: What’s the significance of the MVRV ratio?
A: At the 6th percentile, Bitcoin is historically undervalued—a potential accumulation zone.
Q: Could Fed policy changes reverse Bitcoin’s trend?
A: Yes, but sustained recovery requires broader capital inflows and reduced macro uncertainty.