Bitcoin fails to find a trend; the market fears another aggressive move by the Fed

It is not a good week for the cryptocurrency market. Bitcoin (BTC), the world's largest cryptoasset, is currently slightly falling and is struggling to maintain the $19,100 level, as is Ethereum (ETH), the altcoin with the largest market capitalization, as it tries to consolidate the $1,300 level. In the last 24 hours, the two largest cryptos on the planet have lost more than 2%.

The cryptocurrency market entered a bear market long ago and experts believe there is a long and hard "winter" ahead due to significant negative pressure from various macroeconomic factors. One of them is the high inflation prevailing in the Western world, especially in the United States, which banks are trying to tame with aggressive interest rate hikes and pushing their monetary policy into restrictive territory for the first time in more than a decade.

In this regard, the consensus expects a fourth consecutive 75 basis point hike by the U.S. Federal Reserve (Fed): according to data from the CME Fed Watch tool, analysts give a 95% probability that the central bank will repeat this move again at its Nov. 2 monetary policy meeting.

'The New York Times' adds to this assumption and reports that the Fed is considering a hike "higher than expected a month ago" due to persistent inflation. "Central bankers hoped to discuss the slowdown at their November meeting, but recent data suggest that the labor market remains strong and inflation is relentless, prompting them to delay the discussion for at least a month," they explained, "Now the conversation about the possibility of a taper is more likely to occur in December."

This circumstance is leaving its mark on the cryptocurrency market, as investors are reacting to the uncertainty prevailing in the market by avoiding the assets with higher risk. In this regard, historical price charts show that the price of BTC fell by at least 10% or more following the Fed meetings in March, May and June, at the height of the U.S. central bank's tightening stance.

According to 'Altcoin Daily' co-founders Aaron and Austin Arnold, Bitcoin's consolidation between $19,000 and $20,000 "is reminiscent of the 2018 bear market." "Bitcoin was consolidating near $6,000 and eventually fell 50%," they commented in a 'Kitco News' interview.

In contrast to Arnold's perspective, other analysts argued that the current bear market has characteristics that differentiate it from previous declines. According to trading firm Cumberland, the current bear market cycle is notable for the huge trading volumes that have persisted and they highlight that, with daily trading volumes of more than $50 billion, the market remains "healthy" despite falling prices.

As for the rest of the 'altcoins', one of the big losers of the week is Ripple (XRP), as it accumulated a fall of more than 3% in the last 24 hours. Meanwhile, ADA (Cardano) and Solana (SOL) are retreating by over 3% and 2% in the same period, exchanging for 35 cents and $30, respectively. Polygon is down 0.73 and DOT (Polkadot) is down 1.2%.