{"id":390373,"date":"2022-01-06T15:41:11","date_gmt":"2022-01-06T12:41:11","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/ethereum-plunges-13-down-more-than-bitcoin-after-fed-spooks-crypto-market\/"},"modified":"2022-01-06T15:41:11","modified_gmt":"2022-01-06T12:41:11","slug":"ethereum-plunges-13-down-more-than-bitcoin-after-fed-spooks-crypto-market","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/ethereum-plunges-13-down-more-than-bitcoin-after-fed-spooks-crypto-market\/","title":{"rendered":"# Ethereum plunges 13%, down more than Bitcoin after Fed spooks crypto market"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a40c747369e1\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a40c747369e1\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/ethereum-plunges-13-down-more-than-bitcoin-after-fed-spooks-crypto-market\/#ETHBTC_reaches_key_rebound_level\" >ETH\/BTC reaches key rebound level<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/ethereum-plunges-13-down-more-than-bitcoin-after-fed-spooks-crypto-market\/#Too_soon_to_fear_the_Fed\" >Too soon to fear the Fed<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># Ethereum plunges 13%, down more than Bitcoin after Fed spooks crypto market <\/strong>&#8221;<\/p>\n<div class=\"post-content\" data-v-128018ef>Ethereum&#8217;s native token Ether (ETH) plunged\u00a0sharply hours after the U.S. Federal Reserve <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.federalreserve.gov\/newsevents\/pressreleases\/monetary20220105a.htm\">released the minutes<\/a> of their December meeting, showing that they eye a faster timetable for hiking interest rates in 2022.<\/p>\n<p>The minutes showed that the Federal Open Market Committee (FOMC) is in favor of\u00a0raising short-term rates &#8220;sooner or at a faster pace than participants had earlier anticipated.&#8221; According to the CME Group, trading in the interest-rate futures market <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.cmegroup.com\/market-data\/delayed-quotes\/interest-rates.html\">showed<\/a> a two-thirds possibility of the first increase in March.<\/p>\n<p>Ether turned lower after the minutes were released, dropping by over 13.50% to as low as $3,300. Its plunge mirrored similar downside moves across the crypto market, with Bitcoin (BTC) shedding a little over 9% to nearly $42,100.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-01\/df5adcde-ffd3-4d00-bb55-bdad6212075e.png\"><figcaption style=\"text-align: center;\"><em>ETH\/USD four-hour price chart. Source: TradingView<\/em><\/figcaption><\/figure>\n<p>Incontestably, ETH\/USD returned more losses to its investors than BTC\/USD after the Fed&#8217;s spook. <\/p>\n<p>It <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ears traders decided to unwind tokens sitting atop better long-term profits than Bitcoin. For instance, Ether&#8217;s returns in the last 12 months \u2014 even after the Fed-led drop \u2014 came out to be around 175%. On the other hand, Bitcoin&#8217;s profits were nearly 15.75% in the same period.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-01\/c4d566a6-be10-4196-872b-3b08a5d5261b.png\"><figcaption style=\"text-align: center;\"><em>Performance of top fifteen cryptocurrencies. Source: Messari<\/em><\/figcaption><\/figure>\n<p>Similarly, Ethereum&#8217;s top rival Solana (SOL) also logged more losses than Bitcoin, dipping by more than 13.75% after the Fed <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a>. Nonetheless, its 12-month profits came out to be more than 7,500%, signaling further extreme corrections if the crypto market&#8217;s bias remains skewed toward the bears.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"ETHBTC_reaches_key_rebound_level\"><\/span>ETH\/BTC reaches key rebound level<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Ether also plunged against Bitcoin, according to the performance of a widely-traded instrument, ETH\/BTC, in the past 24 hours.<\/p>\n<p>The pair dropped by a little over 5% to hit 0.077 BTC. In doing so, it also reached a critical support level near 0.078 BTC that has recently been instrumental in keeping Ether bullish against Bitcoin by limiting the former&#8217;s downside bias.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-01\/258776f0-86cf-46ae-ae24-6d84b6303bf1.png\"><figcaption style=\"text-align: center;\"><em>ETH\/BTC daily price chart showing its key support level. Source: TradingView<\/em><\/figcaption><\/figure>\n<p>Meanwhile, the 0.078 BTC-support also appeared to be the lower trendline of Ether&#8217;s descending triangle. Descending triangles are continuation patterns that typically send the price in the direction of its previous trend after a consolidation period.<\/p>\n<p>That increases Ether&#8217;s potential to remain stronger than Bitcoin in the long run, as long as it breaks above the triangle&#8217;s upper trendline with convincingly higher volumes.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Too_soon_to_fear_the_Fed\"><\/span>Too soon to fear the Fed<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>For months, Fed officials were stuck to the opinion that higher inflation in the U.S. drew its inspiration from supply-chain bottlenecks, with chairman Jerome Powell asserting that it would resolve by itself. But in the latest meeting, he showed less conviction toward the so-called &#8220;inflation-is-transitory&#8221; narrative.<\/p>\n<p>That is primarily because the U.S. consumer price index (CPI) reached a nearly 40-year high in November 2021, hitting 6.8% year-over-year. Meanwhile, core consumer prices, which exclude energy and food categories, rose to 4.7% from a year earlier; it came to be above the Fed&#8217;s preferred inflation target of 2%.<\/p>\n<p>&#8220;There&#8217;s a real risk now, I believe, that inflation may be more persistent and\u2026the risk of higher inflation becoming entrenched has increased,&#8221; <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.federalreserve.gov\/mediacenter\/files\/FOMCpresconf20211215.pdf\">said<\/a> Powell on Dec. 15 last year after concluding the FOMC meeting.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-01\/44881f0a-28eb-4934-a797-5719d09af6e4.jpeg\"><figcaption style=\"text-align: center;\"><em>U.S headline inflation over the years. Source: Bloomberg, Bureau of Labor Statistics<\/em><\/figcaption><\/figure>\n<p>Madison Faller, a global strategist at JPMorgan Private Bank, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.bloomberg.com\/news\/articles\/2022-01-05\/asia-stocks-to-fall-as-tech-rout-deepens-on-fed-markets-wrap?srnd=premium-asia\">told Bloomberg<\/a> that investors should not fear the Fed, noting that their three planned rate cuts in 2022 would do little in curbing down consumer prices. Excerpts from her statement:<\/p>\n<blockquote><p>\u201cGrowth and inflation will be decelerating throughout 2022, but nonetheless remain above historic trend levels. We think this will call for a much lower risk of a Fed-induced material market correction.\u201d<\/p><\/blockquote>\n<p>As Cointelegraph also covered, fears of persistently higher inflation, which, in turn, tends to devalue cash, have prompted mainstream investors to park their money in the crypto sector. <\/p>\n<p>For instance,\u00a0Thomas Peterffy, the billionaire founder of brokerage firm Interactive Brokers Group Inc., admitted that he holds 2-3% of his net assets in crypto just in case the fiat money &#8220;goes to hell.&#8221; Likewise, Bridgewater Associates founder Ray Dalio revealed last year that his investment portfolio contains Bitcoin.<\/p>\n<p>The outlook against inflation promised to offer some respite to Ether, which tends to tail the Bitcoin price movements.<\/p>\n<p> Meanwhile, Sean Farrell and Will McEvoy, strategists at Fundstrat Global, noted that investors should increase their investments across the smart contracts sector to get the most from the next market rebound.<\/p>\n<p>&#8220;Given the current macro backdrop, leverage within the Bitcoin market, and recent robustness seen in the altcoin market, we think it&#8217;s appropriate to be overweight Ethereum and other smart contract platforms,&#8221; they said in a note, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.bloomberg.com\/news\/articles\/2022-01-05\/bitcoin-declines-to-lowest-level-since-december-s-flash-crash?srnd=premium-asia\">adding<\/a>:<\/p>\n<blockquote><p>&#8220;We probably would not bet the farm near-term on Bitcoin but think there is an opportunity in going long volatility via derivatives strategies.&#8221;<\/p><\/blockquote>\n<p class=\"post-content__disclaimer\">The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. 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The minutes showed that the Federal Open Market Committee&#8230;<\/p>\n","protected":false},"author":1,"featured_media":390374,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDEvMWE2ZmNhM2EtNTAwZi00NWYxLThiYjItMDgxYTYwNzM5ZTYzLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74937,75147,74982,81262,82402,74891,74938,75582,87885,74939,112089,70550,70551,70552,73785],"class_list":["post-390373","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-bitcoin-price","tag-bloomberg","tag-btc-markets","tag-cryptomarket","tag-ether-price","tag-ethereum","tag-ethereum-price","tag-fiat-money","tag-hyperinflation","tag-market-analysis","tag-quantitative-easing","tag-federal-reserve","tag-inflation","tag-interest-rates","tag-markets"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/390373","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=390373"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/390373\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/390374"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=390373"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=390373"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=390373"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}