Bitcoin (BTC) and Ethereum (ETH), the two largest cryptocurrencies on the planet, continue to hold above €24,000 and €1,600 respectively. However, they did see a slight decline this morning with Bitcoin falling from €000 to €000.
The crypto market continues to swing, with investors closely watching the upcoming minutes of the Federal Open Market Committee (FOMC) meeting, which are expected to be released this week.
The recent downward trend in cryptocurrency costs may be related to positive economic data from the US. This strengthened the belief that the Federal Reserve will continue with its plan to tighten monetary policy for a longer period than expected.
Furthermore, traders appear cautious about large investments already ahead of the results release from Coinbase and Hong Kong's new VASP licensing system, both of which are expected to have a significant market impact in the coming weeks.
How might the release of the FOMC meeting minutes on Wednesday affect cryptocurrency costs?
The release of the Federal Open Market Committee (FOMC) minutes on Wednesday could have an impact on the cost of Bitcoin. As the FOMC sets monetary policy in the US, any trace of a change in that policy could affect financial markets, including the cryptocurrency market.
In a recent address at the Economic Club of Washington, Federal Reserve Chairman Jerome Powell discussed the ongoing disinflation process and expressed confidence in the Fed's ability to bring inflation down to its XNUMX% target rate.
Although Powell's response to the strong January jobs report did not signal a change in the central bank's approach to future rate hikes, he warned that strong and enduring jobs data could lead to a higher final level of federal funds.
At its February XNUMX meeting, the Federal Reserve raised the target range for the federal funds rate by XNUMX basis points, now from XNUMX% to XNUMX%. This is the second successive meeting in which the magnitude of the increase has been reduced, although borrowing costs are now at their highest level since XNUMX.
Bitcoin traders and investors will closely watch the FOMC minutes for any indication of inflationary concerns or interest rate changes, which could affect the cost of Bitcoin.
Exploring slight dips in the cryptocurrency market
The global cryptocurrency market has been doing well for the past few days, but has experienced a slight decline in the last 68-hour period. At the time of writing this article, the total market value was one.XNUMX trillion US dollars, representing a decrease in value of zero.XNUMX%.
The market's inactivity could be related to the fact that the US is celebrating President's Day, which may make traders wary of placing large offers. As a result, Bitcoin also experienced a slight drop in value on the previous day.
Meanwhile, Ether has also tested a decline in the last XNUMX hours, probably for the same reason. As a result, other well-known cryptocurrencies such as Dogecoin (DOGE), Litecoin (LTC) and Ripple (XRP) also suffered slight losses.
Can a strong US dollar hurt cryptocurrency? Examine the relationship between the USD and digital assets
The US dollar made significant gains and showed strength in all areas, buoyed by positive US economic data that dampened hopes of a prolonged period of monetary policy tightening by the Federal Reserve.
The market expects interest rates to rise on the back of recent statistics released by the world's largest economy, pointing to a tight job market, persistent inflation, strong retail sales development and monthly increases in production costs. .
Market forecasts indicate that the federal funds rate should peak just below XNUMX% in July. The US dollar was boosted by the belligerent beliefs of Fed members who think higher interest rates will be needed to successfully combat inflation.
Therefore, the strength of the US dollar has been seen as an essential factor contributing to the fall in the values of cryptocurrencies, especially Bitcoin (BTC) and Ethereum (ETH).
bitcoin price
Looking at Bitcoin from a technical perspective, it traded sideways and held a tight range between €23,700 and €25,200. The immediate resistance level for the BTC/USD pair is today at €25, and if the cost breaks above this level, it could hit the €26 zero mark.
However, major technical indicators including the RSI and MACD are showing divergence. The RSI is currently above fifty in a buy zone, while the MACD is forming histograms below zero in a sell zone. This kind of divergence often signals investor irresolution.