Crypto Today: Bitcoin, Ethereum, XRP slide as risk-off sentiment persists after Fed decision
- Bitcoin holds $90,000, weighed down by risk-off sentiment after the Fed’s monetary policy decision.
- Ethereum resumes decline below the 50-day EMA despite steady ETF inflows.
- XRP holds $2.00 short-term support amid a weak but stable derivatives market.
Bitcoin (BTC) is trading above $90,000 at the time of writing on Thursday, weighed down by risk-off sentiment in the broader cryptocurrency market. Altcoins, including Ethereum (ETH) and Ripple (XRP), are also in the red despite the Federal Reserve (Fed) lowering its benchmark lending rate on Wednesday.
Data spotlight: Bitcoin, Ethereum, XRP react to a cautious Fed rate cut
The Fed went ahead with the much-anticipated cut, bringing its benchmark lending rate to a range of 3.50%-3.75% on Wednesday, but Bitcoin reacted by sliding to an intraday low of $89,389 on Thursday.
Despite meeting expectations, the rate cut was accompanied by a cautious tone. Fed Chair Jerome Powell emphasized upside inflation risks and a slow labor market as factors supporting fewer rate cuts in the coming year.
The hawkish stance dampened hopes for aggressive monetary policy easing, prompting investors to book early profits and slowing the trend. The FedWatch Tool shows that interest rate traders expect the central bank to leave interest rates unchanged in January, with only 20% in favor of further easing to a range of 3.25%-3.50%.
ETH inflows extend despite grim outlook
Bitcoin spot Exchange Traded Funds (ETFs) posted nearly $225 million in net inflows on Wednesday, shrugging off macroeconomic uncertainty. This marks two consecutive days of inflows led by BlackRock’s IBIT ETF with approximately $193 million.
The cumulative inflow volume currently stands at $57.93 billion, with net assets of $122.43 billion, according to SoSoValue data.
Ethereum spot ETFs listed in the United States (US) also recorded inflows with nearly $58 million on Wednesday. The largest altcoin by market capitalization has amassed $13.15 billion in total ETF volume, with net assets of $21.43 billion. Steady inflows could shape positive sentiment and boost demand for Ethereum ahead of the New Year.
Meanwhile, XRP spot ETFs saw inflows of $10 million on Wednesday, a slight improvement from $9 million the previous day. Since their launch on November 13, XRP ETFs have not experienced outflows, with cumulative inflows totaling $954 million and net assets amounting to $940 million.
Chart of the day: Bitcoin holds key support
Bitcoin is trading above its short-term $90,000 support on Thursday amid persistent selling pressure. The downward-facing 50-day Exponential Moving Average at $96,553, the 100-day EMA at $101,928 and the 200-day EMA at $103,575 underline the overall downtrend.
The Relative Strength Index (RSI) has declined to 44 on the daily chart after rejection at the 50 midline, suggesting that bearish momentum is increasing. If Bitcoin closes the day below $90,000, sellers may gain an upper hand and plausibly push toward the support tested on Sunday at $87,719.
Still, the Moving Average Convergence Divergence (MACD) indicator has maintained a buy signal since November 26, which suggests that bulls have a slight edge and could push for a rebound toward resistance at $94,150. However, the green histogram bars must continue to expand to reinforce the bullish thesis.
Altcoins update: Ethereum, XRP trade under pressure
Ethereum is trading below $3,200 at the time of writing on Wednesday, with the 50-day EMA at $3,310, the 200-day EMA at $3,453 and the 100-day EMA at $3,506, hovering above the price. Buyers should push to flip the moving averages into support to reinforce the bullish thesis and target a breakout to highs above $4,000.
The RSI is declining toward the midline, indicating that bullish momentum is easing. An extended correction below 50 could accelerate declines toward $3,000 in the short term.
Still, the MACD shows that bulls can still influence the trend if the indicator crosses into the bullish region. The blue line should remain above the red signal line, encouraging investors to increase their risk exposure.
As for XRP, sellers are largely in control, with XRP pressing down on support at $2.00. The cross-border money remittance token also sits below the 50-day EMA at $2.24, the 100-day EMA at $2.41 and the 200-day EMA at $2.46, which maintain a bearish outlook as they slope lower and cap rebounds.
The MACD line is hovering near the red signal line on the daily chart, and the histogram bars remain relatively flat, suggesting lackluster momentum.
With the RSI at 42 (neutral-bearish) and declining, buying interest could be subdued as it approaches oversold territory.
Still, a daily close above the 50-day EMA at $2.24 would ease pressure and could open a recovery toward the 100-day EMA at $2.41. Overall, bears may stay in control until the XRP price reclaims the moving averages as support and momentum improves.
Crypto ETF FAQs
An Exchange-Traded Fund (ETF) is an investment vehicle or an index that tracks the price of an underlying asset. ETFs can not only track a single asset, but a group of assets and sectors. For example, a Bitcoin ETF tracks Bitcoin’s price. ETF is a tool used by investors to gain exposure to a certain asset.
Yes. The first Bitcoin futures ETF in the US was approved by the US Securities & Exchange Commission in October 2021. A total of seven Bitcoin futures ETFs have been approved, with more than 20 still waiting for the regulator’s permission. The SEC says that the cryptocurrency industry is new and subject to manipulation, which is why it has been delaying crypto-related futures ETFs for the last few years.
Yes. The SEC approved in January 2024 the listing and trading of several Bitcoin spot Exchange-Traded Funds, opening the door to institutional capital and mainstream investors to trade the main crypto currency. The decision was hailed by the industry as a game changer.
The main advantage of crypto ETFs is the possibility of gaining exposure to a cryptocurrency without ownership, reducing the risk and cost of holding the asset. Other pros are a lower learning curve and higher security for investors since ETFs take charge of securing the underlying asset holdings. As for the main drawbacks, the main one is that as an investor you can’t have direct ownership of the asset, or, as they say in crypto, “not your keys, not your coins.” Other disadvantages are higher costs associated with holding crypto since ETFs charge fees for active management. Finally, even though investing in ETFs reduces the risk of holding an asset, price swings in the underlying cryptocurrency are likely to be reflected in the investment vehicle too.
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