Bitcoin and other cryptos extend their post-massacre lows ahead of Fed meeting

As for other altcoins, the results are similar, with most alternative tokens to Bitcoin in the red, despite trying to consolidate the recent plunge that was more than 20% for some of the main tokens by market capitalization. Ethereum accumulated a 25% drop in the last seven days and 50% from its all-time high.

Ether, the Ethereum network unit, falls to $2,270, its worst change in six months, however, technical analysis points to a "death crossover" figure between the major moving averages, promoting a continuation of the decline. For now, the 4-hour hourly charts suggests prolonged weakness below $2,300 and further declines to $2,000, where its most important support is located.

As for Ripple, Cardano, Dogecoin or Shiba Inu, they have suffered the same fate, and the total market value has fallen around $400 billion to $1.61 trillion, with some analysts encouraging to buy on the dips to pocket some bargains. Meanwhile, other voices warn that the imminent US Federal Reserve (Fed) meeting may trigger more risk aversion and further falls in Wall Street tech stocks.

"The Fed is worried about inflation, because the White House is too. The Fed is going to make that clear, even if it does not move this month,"experts at Rabobank warned. These analysts added that, given the portents of several rate hikes this year, "it won’t address underlying supply-chain issues at all; but, on past form, it will probably crash just about everything else. Crypto and the NASDAQ (-12% year-to-date) are just a warning".

As for other reasons to explain what happened, the balance of the Bitcoin trading platforms' flows may offer a better snapshot. Between January 20th and January 21st, 2022, there was a spike in cryptocurrency inflows, suggesting that people were selling their assets. However, this was followed by outflows.

After that, the balance of exchange flows showed slight inflows again. However, it is worth noting that the recent outflows were nowhere near the levels seen around January 11th, 2022. This is a sign that investors remain cautious.

Data from Santiment has previously shown that investors wanted to buy the dip well before the lowest price point. Now, the metrics seem to suggest that investors are becoming more cautious. Despite extreme levels of fear in the market, not many are acting greedily in anticipation of numerous looming regulatory developments in the US and Russia, as Rabobank analysts pointed out.