Cryptos remain depressed after Fed; Bitcoin could fall to $23,000

Cryptocurrencies consolidate their bearish turn. Bitcoin (BTC) and Ethereum (ETH) fall around 1% in the last 24 hours, although they start the week with moderate rises, and stand at the level of $26,100 and $1,580.

The latest monetary policy decision of the Federal Reserve (Fed) has weighed heavily on digital assets: since last Wednesday, the reigning cryptocurrency has dropped almost $1,000 after losing around 4% in just 3 sessions. And the fall among altcoins is more pronounced. This is because investors have not been convinced by the hawkish message of the US central bank, as it warned that it could raise interest rates once again in the remainder of the year, a scenario that the consensus seems to continue to rule out according to data from CME's FedWatch tool.

This new scenario drawn by the Fed has caused analysts' outlook to be somewhat more negative for the coming weeks, especially due to a predictable (and worrying) absence of positive catalysts. In this regard, the nil rally following the Mt. Gox payout delay worries some investors, while the Securities and Exchange Commission (SEC) is expected to again extend the deadline for deciding on Bitcoin spot ETFs when the mid-October deadline arrives. As a result, analysts at FxPro see Bitcoin falling to $23,000 in the coming days.

Despite this, Craig Erlam, senior cryptocurrency analyst at OANDA, stressed that "broadly speaking though, not a lot has changed for Bitcoin recently." "There's been some bursts of volatility but price-wise, it's just fluctuating primarily between $25,000 and $27,500. Perhaps it's simply a case of traders awaiting more ETF news, or other catalysts within the space, as the post-Fed move wasn't particularly significant," he added.

Likewise, other analysts point to upside risks for cryptos. CryptoQuant experts stated that Bitcoin's recent price behavior closely resembled past cycles, suggesting that the asset "will likely remain in a consolidation phase until the 2024 halving event."

"This assessment is supported by various long-term valuation metrics, including logarithmic growth curves.There’s also the realized cap of short-term user transactions (UTXOs), which indicates under-valuation and the absence of widespread retail speculation, reinforcing the potential for future price growth," they added.

From a technical point of view, Javier Molina, senior market analyst at eToro, commented that "there is a high probability of having marked a floor at the lows seen in the $24,800-$25,000 area."

"From that reference, an upward move with the first target at $28,000. This is the area to overcome in order to think about higher levels limited by $31,000. From a sentiment point of view, we are still in the "fear" zone, which could help us to try to attack the $28,000 resistance in the short term. We need to see a significant increase in volume to attempt such a move," Molina explained.

In the rest of the market, XRP falls by more than 2.5% and Toncoin (TON) drops 3.3%. Solana (SOL) and Dogecoin (DOGE) retreat around 1%.