The creators of one of the crypto space’s leading on-chain analytics firms are weighing in on Bitcoin (BTC) after the Federal Reserve issued another interest rate hike.
In Glassnode’s latest newsletter, Jan Happel and Yann Allemann claim that Bitcoin is trading below $20,000 due to “intense pressure” from another rate hike to the tune of 75 basis points (bps).
According to Happel and Allemann, the Fed’s hawkish stance overshadows fundamental developments in the crypto space, pushing Bitcoin to face heightened risk coupled with bearish momentum.
“Monetary policy and regulatory fronts offer nothing but headwinds to crypto.”
In addition to an unfavorable macro backdrop, the co-founders of Glassnode also say that BTC volume surging amid a downtrend could portend more pain for Bitcoin holders.
“Whenever spot volume supports a downtrend, it tends to extend into the near future, and a reversal requires substantial buying pressure.”
The duo also point out that traders and speculators are showing signs that they are not optimistic about BTC’s outlook.
“The spot market futures volume ratio is well below one, and since June’s surprise 50 basis point rate hike, it has been on a steady downward trend. This development indicates less than trust and speculation in the system.
Overall, Glassnode executives anticipate that Bitcoin will continue to trade in a wide range in a bearish environment.
“Based on J. Powell’s remarks, a subsequent 75 basis point rate hike, previous FOMC (Federal Open Market Committee) weeks, and the state of the system, Bitcoin likely continues to trade within the trading range of $17,000 to $25,0000. Even though the spot market saw a slight increase in trading volume, the options and futures market showed selling pressure in a high-risk and bearish regime.
At the time of writing, Bitcoin is trading hands for $19,033, down more than 1% on the day.
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