The price of Bitcoin Cash (BCH / USD) fell back to the lowest level in a month after the warning from the Federal Reserve. It is trading at $ 396, roughly 75% below the highest level in 2021.
Federal Reserve Warning
Bitcoin Cash and other cryptocurrencies are generally classified as risk assets. These assets tend to perform well in a period of low interest rates and then lag when the adjustment begins.
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In recent weeks, the mood in the market has been a bit aggressive after the Federal Reserve hinted that it will start to tighten up. At the meeting, the bank said it will double the size of the phase-down and then finalize QE in March this year.
Bitcoin Cash and other risky assets like tech stocks on the Nasdaq 100 fell sharply on Wednesday after the Fed released its minutes.
The minutes showed that the bank will be forced to push through its adjustment in an attempt to combat inflation. Recent data showed that the general consumer price index (CPI) increased 6.2%, while the basic CPI rose 4.4%. They said:
“Some participants felt that a less accommodative future policy would probably be warranted and that the committee should convey a strong commitment to address the high inflationary pressures.”
Other cryptocurrencies also fell. Bitcoin is down to around $ 43,000, which means it is down more than 40% from its peak in November. Ethereum and other altcoins were down, bringing the total market capitalization of cryptocurrencies to about $ 2 trillion.
Historically, Bitcoin and Bitcoin Cash had a strong correlation, which means that their prices track each other. Whenever Bitcoin went up, Bitcoin Cash followed.
Recently, however, this correlation has ended. The same goes for Ethereum and Ethereum Classic. It is not clear why this divergence has occurred.
Bitcoin Cash price prediction
The daily chart shows that the BCH price has been in a strong downtrend in recent months. Recently, the currency managed to move below key support at $ 470, where it struggled to move below in September.
It also moved below the 25- and 50-day moving averages, while the Relative Strength Index (RSI) has been in a downtrend.
Therefore, the currency is likely to continue to slide as the bears point to the key support at $ 350, which was the lowest level in December.
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Bitcoin Cash price prediction after Federal Reserve minutes | Invezz