The Federal Open Market Committee meeting that took place on Wednesday, September 21st, sparked massive volatility for Bitcoin and other cryptocurrencies. This volatility was expected and stuck to previous trends like hourly. It leaves a lot to be desired with the way it played, though, and sets a precedent for the cryptocurrency market, particularly during a downturn.
Bitcoin fluctuations are nerve wrecking
The Federal Open Market Committee meeting was held on Wednesday, and The direction of the volatility was almost identical to the way it was expected to go. At around 18:00 UTC, the market experienced most of this volatility. The price of Bitcoin dropped by more than $1,000 during this time. However, this will only last for a short time because the price of the digital asset is back on the rise after about three hours. However, the impact of this volatility will be felt in the cryptocurrency market even after the FOMC meeting ends.
The recovery after the drop would have brought the bitcoin price back to where it was before the drop, but the momentum took a hit, causing the price to fail to maintain a critical level. When the bitcoin price fell below $19,000 after that, it boosted the digital asset into another downtrend.
BTC fails to hold $19,000 | Source: BTCUSD on TradingView.com
Bitcoin is now about $2000 below its 50 day moving average. This led to sell-offs in digital assets during this time. BTC support remains just above $18,500, which puts the digital asset in a precarious position, although it is currently trading above $19,000.
Market sentiment rocks the Fed
Despite the significant levels of volatility the digital asset has seen in the market, investors seemed to be ready for it, which is evidenced by the market sentiment of the last day. Before the meeting on Wednesday, the Cryptographic Fear and Greed Index It was trending at 23, which puts it in an area of extreme fear.
Sentiment remains in extreme fear | Source: alternative.me
However, as market sentiment usually declines in such situations, it continued to hold, losing only one point during this time. The Fear and Greed Index currently puts the crypto market sentiment at a score of 22. This is still in the area of extreme fear, and shows a lot of caution when it comes to investing in the market, but it also shows that investors have been hating the volatility of the market.
The good news is that although the price of Bitcoin is still low, the market is starting to stabilize. So even though there have been significant losses in the market over the past day, it is now retreating in a way that gives investors time to re-evaluate their positions and plan accordingly.
Featured image from IONOS, chart from TradingView.com
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