Fed's Interest Rate Decision Nears... Will Bitcoin Hold $75,000 and XRP $1.30?

▲ Bitcoin (BTC), Ethereum (ETH), XRP/ChatGPT generated image ©

The cryptocurrency market is on high alert ahead of the Fed's interest rate decision. Bitcoin (BTC) has fallen for two consecutive days near $75,000, Ethereum (ETH) has dropped below $2,400, and XRP (Ripple) has also fallen below $1.30. Major cryptocurrencies are simultaneously under pressure due to the failure of the U.S. crypto market structure bill, the Clarity Act, to pass a Senate vote, coupled with outflows from spot ETFs.

According to investment media FXStreet on September 16 (local time), the market expects the U.S. Federal Reserve (Fed) to raise the benchmark interest rate to 3.75-4.00% on that day. The probability of an interest rate hike reflected in FedWatch is as high as 92.5%. Analysis suggests that the need for tightening has increased as inflation pressures continue amidst high international oil prices due to geopolitical tensions in the Middle East. Crypto Finance predicted that the announcement by the U.S. Federal Open Market Committee (FOMC) and the subsequent press conference could be a key catalyst for rapid price changes across asset markets.

Regulatory uncertainty is also weighing on investor sentiment. The Clarity Act failed to pass a U.S. Senate vote the previous day. Michael Ho, co-founder of D3, pointed out that with the bill not progressing this time, legislative work developed over several years might have to restart in a new Congress. As macroeconomic and regulatory uncertainties converged, U.S. Bitcoin spot ETFs saw a net outflow of $450 million on Tuesday, a sharp reversal from the $160 million net inflow the day before. The cumulative net inflow, according to SoSoValue, stands at approximately $55 billion.

Ethereum spot ETFs also saw an outflow of $141 million. This contrasts with inflows of $121 million the previous day and $216 million last Friday. After an $11 million inflow the day before, fund flows for XRP spot ETFs slowed on Tuesday. The cumulative net inflow is recorded at $1.71 billion, with an average net asset value of $1.41 billion.

Technically, BTC is under pressure near $75,000 but maintains a mid-term bullish structure, staying above the 50-day, 100-day, and 200-day Exponential Moving Averages (EMAs) located at approximately $71,400-$73,600. However, the Relative Strength Index (RSI) has dropped to around 48, and the Moving Average Convergence Divergence (MACD) is also negative below the 0-line. On the downside, the 50-day EMA at $73,568 and the 200-day EMA at $73,093 serve as the initial support zone, with the 100-day EMA at $71,384 identified as the next support level if further declines occur. Below that, $65,494, where a past falling resistance line converted into support, is presented as a long-term defensive line.

Ethereum is trading below $2,400 but maintains a mid-term bullish structure, staying above the 50-day EMA at $2,275, the 200-day EMA at $2,206, and the 100-day EMA at $2,156. In contrast, XRP is at $1.28, remaining below its 50-day EMA at $1.28 and 200-day EMA at $1.36, indicating a pronounced short-term bearish trend. XRP's RSI is around 45, and the MACD is negative, showing sell-side momentum, with the 100-day EMA at $1.25 presented as a key support level. Analysis suggests that a clear break below this level could open up possibilities for further correction.

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