Is the Crypto market heading for a bigger correction?
In line with our last week's projection, in reaction to the publication of the report on consumer inflation (CPI) in the US, which shows that the growth rate of consumer prices fell in August 2022 to only 8.3% from 8.5% reported in July In 2022, the Bitcoin price last Tuesday fell by almost 10%.
Economists expected a decline in the dynamics of price growth to 8.1%. Thus, CPI inflation maintained at a higher level increased the likelihood of the Federal Reserve (Fed) making the third consecutive 75bp hike in the federal funds rate at the meeting scheduled for this week.
It turned out, however, that Tuesday's decline by nearly 10% was only the beginning of a downward move. This sale has been continued until now, as a result of which its range has increased to nearly 20%. This also pushed BTC back below $ 19,000 as the new week starts, the lowest level since mid-June 2022 and one of the lowest since December 2020.
If the currently tested support is defeated, the Bitcoin rate could soon continue its downward rally even towards USD 12,000.
Much, however, will depend on the tone of the communiqué following the September meeting of the Federal Open Market Operations Committee (FOMC), which we will get to know next Wednesday, and the subsequent press conference attended by Fed president Jerry Powell.
However, there are many indications that this tone may be more hawkish than dovish, which could naturally drive further decline in the broad cryptocurrency market, including Bitcoin.
The highly anticipated Ethereum update called The Merge, aimed at creating a more sustainable blockchain, transformed the second largest cryptocurrency from a proof-of-work consensus model to proof-of-stake.
Although in terms of technology and ecology, it was a real revolution, speculatively, ETH has lost a lot of it.
The Ethereum exchange rate has dropped by over 28% recently, beating technical support of USD 1,425 and approaching another region of USD 1,250, which is in line with last week's projection.
If the downward trend continues and the next support is also broken, then the quotations of this cryptocurrency could go straight towards USD 1000 or even further up to USD 800.
Bitcoin Cash (BCH)
Since mid-August this year, Bitcoin Cash has maintained a horizontal trend between $ 112 support and $ 133 resistance.
Per our last week's projection, after rebounding from technical resistance of $ 133, the BCH fell by more than 23%, which not only put it back in the vicinity of $ 112 technical support but also fell below it. This, in turn, may fuel a further downward rally, as a result of which the price of this cryptocurrency could move towards USD 97, which we also wrote about a week ago.
In line with our forecasts from a week ago, the US CPI reading above 8.1% contributed to a decline in the LTC rate to USD 52. We are currently seeing an attempt to go below this support. If this attempt is successful, we could expect further depreciation towards USD 47 or even USD 42. There, there are only the next technical support levels, in the vicinity of which we could expect the emergence of demand pressure.
As expected, the increases observed between August 20 and September 12, 2022, turned out to be only a correction, after which the MATIC price returned to the downward path. Over the past few days, it has dropped by more than 23%, returning to the technical support of $ 0.75.
Considering the dynamics of the downward movement observed for several days and an attempt to go below USD 0.75, we maintain our last week's projection assuming a continuation of declines towards USD 0.61, USD 0.45 or even USD 0.32.
Looking at the XRP quotes, we notice that the price of this cryptocurrency fell after the publication of the report on CPI inflation in the US to the technical support of 0.32 USD. It was there, last Friday, that there was a strong demand response. It contributed to the return of this cryptocurrency to the area of highly significant resistance in the region of USD 0.38, where, in turn, strong supply pressure reappeared on Sunday.
Therefore, we could expect a return of XRP towards USD 0.32, or even its further decline to USD 0.30.
We could also expect a continuation of the downward movement on the Nem cryptocurrency quotes. Its price has recently dropped by over 20%, beating technical support of USD 0.041, which may drive further depreciation towards the June and July lows, which is 0.037 USD.
Looking at the performance of the EOS, we notice that after rebounding from the technical resistance of USD 1.90, the price of this cryptocurrency has plunged by over 35% in recent days, breaking the upward trend line and horizontal support of USD 1.35.
All this means that in the near future, we could expect further depreciation, as a result of which the EOS price could return to around USD 1.15, USD 1.04, or even drop to USD 0.88.
Chainlink's quotes rebounded last Sunday from technical resistance of USD 8.10, slipping by over 14%. Due to this sell-off, we are currently observing an attempt to break the line of an upward trend. If this attempt is successful and the price of this cryptocurrency drops below this support, we could expect further declines towards USD 6.20 or even USD 5.75.