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Crypto Sell-off Forces Coinbase to Cut Jobs, Fed Rate Decision Looms

Crypto Sell-off Forces Coinbase to Cut Jobs, Fed Rate Decision Looms

Bitcoin, Ethereum, Coinbase Talking Points

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Persistently high inflation remains at the forefront of risk sentiment proving that the days of Bitcoin being perceived as a hedge against inflation are long gone. In response to Friday’s US CPI report, a higher probability for the Fed to hike rates by 75bps tomorrow resulted in a broad sell-off in risk assets, dragging the crypto market cap with it.

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With the FOMC meeting currently underway, the crypto massacre has taken a slight breather, allowing Bitcoin to find support above the key $20,000 handle. Although fundamentals have been priced in (to a certain extent), the Fed interest rate decision and the accompanying Press Conference may still provide an additional catalyst for price action if further monetary tightening measures are announced.

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As digital assets remain vulnerable to wanning sentiment, Coinbase CEO Brian Armstrong announced that the largest US crypto exchange would be reducing their workforce by 18%, bringing the health of the industry into question.

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With Bitcoin currently trading at December 2020 levels, key technicals may provide additional layers of support and resistance for the imminent move.

For now, the key $20,000 psychological level holds as critical support with a break below opening the door for two major Fibonacci levels residing at $18,397 and $17,569 respectively. Meanwhile, the MACD (Moving Average Convergence/Divergence) continues to trade below the zero line,suggestive that bears remain as the prominent drivers of price action, at least for now.

Bitcoin (BTC/USD) Daily Chart

Source: TradingView, Chart by Tammy Da Costa

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--- Written by Tammy Da Costa, Analyst for DailyFX.com

Contact and follow Tammy on Twitter: @Tams707

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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