Is the worst behind Bitcoin? Glassnode co-founders look at the state of BTC after another Fed rate hike
The creators of one of the best on-chain research firms in the crypto space 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 say Bitcoin is trading below $20,000 due to “intense pressure” caused by a new 75 basis point (bps) interest rate hike.
According to Happel and Allemann, the Fed’s hawkish stance is overshadowing fundamental developments in the crypto space, driving Bitcoin to face increased risk coupled with bearish momentum.
“Both the monetary policy and regulatory fronts offer nothing but headwinds to crypto.”
On top of an unfavorable macro backdrop, the Glassnode founders also say that BTC’s increasing volume amid a bearish trend could portend more pain for Bitcoin holders.
“When spot volume supports a downtrend, it tends to extend into the near future, and a reversal requires significant buying pressure.”
The duo also highlights that traders and speculators are showing signs that they are not optimistic about the prospects of BTC.
“The futures-to-spot volume ratio is well below one, and since the surprise 50 bps interest rate hike in June, it has fallen steadily. This development indicates less confidence and speculation in the system.”
Overall, Glassnode executives predict that Bitcoin will continue to trade in a broad range within a bearish environment.
“According to J. Powell’s comments, a subsequent 75 bps interest rate hike, previous FOMC (Federal Open Market Committee) weeks and the state of the system, Bitcoin is likely to continue trading in the $17,000-$25,0000 trading range. Although the spot market saw a pick-up in traded volume, the options and futures markets indicated selling pressure amid a high-risk and bearish regime.”
At the time of writing, Bitcoin is changing hands at $19,033, down over 1% on the day.
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Featured image: Shutterstock/iurii/Andy Chipus
