Federal Reserve’s Interest Rate Increase of 75 Basis Points This Wednesday
The cryptocurrency market is facing challenges as investors continue to shy away from riskier assets following another large interest rate hike by the Federal Reserve. The central bank raised its policy rate by 75 basis points for the third consecutive time, bringing the range to 3.00-3.25%, and signaled further substantial increases, with projections showing the policy rate reaching 4.40% by the end of 2022 and peaking at 4.60% in 2023.
The upside potential for BNB Coin and the broader cryptocurrency market remains constrained, especially given the Fed’s statement that rate cuts will not occur until 2024. Fed Chair Jerome Powell emphasized that the central bank is committed to reducing inflation from its highest levels in four decades and will continue working towards this goal.
U.S. stocks also weakened following Wednesday’s rate hike, and a downturn in the stock market often leads to similar movements in the cryptocurrency market. Craig Erlam, a Senior Market Analyst at Oanda, stated that the outlook for risk appetite in the short term is bleak. Brian Klimke, Director of Investment Research at Cetera Financial Group, added:
“The market will be highly sensitive to any Fed comments and data that emerge. I expect more volatility as the market processes this information.”
Mike Novogratz, head of Galaxy Digital and former Goldman Sachs fund manager, suggested that cryptocurrencies would not see significant gains until the Fed shifts its policy from hawkish to a more accommodative stance. Meanwhile, Robert Kiyosaki, author of the widely read financial education book “Rich Dad, Poor Dad,” believes the current market offers substantial opportunities for wise investors.
BNB Coin Price Analysis
BNB Coin has decreased from $336 to $256 since August 11, 2022, and is currently priced at $270. The price may struggle to maintain support above the $250 mark in the coming weeks. If BNB breaks below this level, it could potentially test the $230 level.
The chart below highlights the trendline, and as long as BNB’s price stays below this trendline and the $300 threshold, it’s unlikely that a trend reversal will occur, keeping BNB in the SELL-ZONE.
Key Support & Resistance Levels for BNB Coin
In this chart (starting from March 2022), I’ve highlighted key support and resistance levels that can guide traders in understanding potential price movements. Binance Coin remains in the “bearish phase,” but should the price rise above $300, it could signal a trend reversal, with the next target potentially around $330 or even $350. The current support level sits at $250, and if this level is breached, it would trigger a “SELL” signal, opening the path to $200. If the price falls below $200—an extremely strong support zone—the next possible target could be $180.
Factors That Could Propel BNB Coin’s Price Higher
Despite many surveys showing that institutional investors remain bearish on cryptocurrencies, it’s worth noting that this sentiment is not limited to institutional players alone. The spot markets are also under pressure as sell-offs have resumed. Due to this, Binance Coin (BNB) might struggle to maintain levels above $250.
Binance Coin is still in a “bearish phase,” but should its price rise above $300, it would trigger a “buy” signal, and the next resistance could lie at $330. Traders should also consider that BNB’s price is closely correlated with Bitcoin’s price movements, so if Bitcoin surpasses $25,000, BNB could reach $350 or even $400.
Indicators of Potential Downfall for BNB Coin
BNB Coin has dropped more than 15% since August 11, and the potential for further decline remains. Several factors are contributing to a pullback from investors, including heightened volatility, which is strongly linked to Bitcoin’s price movements and the U.S. stock market’s performance. The upside potential for BNB and the overall cryptocurrency market remains limited, especially with the Fed’s stance of not cutting rates until 2024. Salah-Eddine Bouhmidi, Head of Markets at I.G. Europe, believes Bitcoin could fall to $13,500 by the year’s end, which would almost certainly push BNB below $200.
Прозрения от анализатори и експерти
Following the 75-basis-point rate hike from the U.S. central bank this Wednesday, the Fed signaled more substantial increases ahead. Jerome Powell, the Fed chair, reaffirmed that the central bank is determined to reduce inflation and will continue its efforts until this objective is met. With the ongoing war in Ukraine contributing to the inflationary pressures, the prices of many cryptocurrencies are expected to remain subdued in the short- and possibly medium-term. Mike Novogratz, Head of Galaxy Digital, stated that significant cryptocurrency gains will not occur until the Fed shifts to a more dovish stance. However, Robert Kiyosaki sees many opportunities for smart investment in the crypto market at this time.
