The creators of one of the leading on-chain analytics firms in the crypto space are weighing in on Bitcoin (BTC) after the Federal Reserve launched another rate hike.
In the latest Glassnode newsletter, Jan Happel and Yann Allemann say that Bitcoin is trading below $20,000 due to “intense pressure” brought on by a fresh interest rate hike at 75 basis points (bps).
According to Happel and Allemann, the Fed’s hawkish stance is overshadowing fundamental developments in the crypto space, leaving Bitcoin exposed to increased risks along with downside momentum.
“Neither monetary policy nor the regulatory front has brought anything more than crypto craze.”
In addition to the unfavorable macro backdrop, the Glassnode co-founders also say that increasing volume of BTC amid a downtrend can cause a lot of pain for Bitcoin holders.
“Whenever spot volume favors a downtrend, it tends to last for the foreseeable future and a reversal requires significant buying pressure.”
The duo also emphasized that traders and speculators are showing signs of not being optimistic about the outlook for BTC.
“The ratio of futures to spot volumes is much lower, and since the unexpected 50 bps rate hike in June, it has been on a steady downward trend. This development shows less trust and speculation in the system.”
Overall, Glassnode executives predict that Bitcoin will continue to range-trade in a bearish environment.
“According to J. Powell’s comment, the next 75 bps rate hike, the previous weeks of the FOMC (Federal Open Market Committee) and the state of the system, Bitcoin is likely to continue to trade in a range. trades $17,000 to $25,0000. While the spot market saw increased volume, the options and futures markets showed selling pressure amid a bearish and high-risk regime.”
At the time of writing, Bitcoin is changing hands at $19,033, down more than 1% on the day.