The FOMC meeting that was held on Wednesday, September 21st, triggered massive volatility for bitcoin and other cryptocurrencies. This volatility was expected and stuck to the previous trends like clockwork. It leaves a lot to be desired in the way that it played out, though, and shows a precedent for the crypto market, especially during the bear run.
Bitcoin Volatility Wracks Nerves
The FOMC meeting had held on Wednesday, and the volatility trend had followed almost identically to the way it was expected to go. Around 18:00 UTC, the market had seen the most of this volatility. Bitcoin’s price had dropped in value by more than $1,000 during this time. However, this would only last for a short while because the price of the digital asset was back up around three hours later. Nevertheless, the crypto market would feel the impact of this volatility even after the FOMC meeting was completed.
The recovery after the decline had put the price of bitcoin back close to where it was pre-fall, but the momentum had taken a hit, causing the price to fail to hold a critical level. When bitcoin’s price fell below $19,000 following this, it cemented the digital asset on another bearish trend.
Now bitcoin is about $2,000 below its 50-day moving average. This has triggered sell-offs in the digital asset during this time. Support for BTC still lies at just above $18,500, which puts the digital asset in a precarious situation despite currently trading above $19,000.
Market Sentiment Shakes Off Fed
Despite the substantial volatility levels that the digital asset had experienced in the market, investors seemed to be ready for it, which is evidenced by the market sentiment for the last day. Before the meeting had held on Wednesday, the Crypto Fear & Greed Index had been trending at a price of 23, putting it in the extreme fear territory.
Sentiment remains in extreme fear | Source: alternative.me
However, where the market sentiment would usually tank in such situations, it continued to hold steady, only losing a single point during this time. The Fear & Greed Index currently puts the crypto market sentiment at a score of 22. This is still in the extreme fear territory, showing a lot of caution when it comes to investing in the market, but it also shows that investors were averse to the volatility in the market.
The good news is that although bitcoin’s price is still down, the market has begun to stabilize. So even though there have been significant losses in the market over the last day, it is now leveling out in a way that gives investors the time to reassess their positions and plan accordingly.
Featured image from IONOS, chart from TradingView.com