Cryptocurrencies are falling today, initiating a risky move for altcoins. What will happen next? In the weekly report on Sunday, we mentioned that volatility would increase by Friday. It did, and it seems likely to have even greater consequences in the coming hours.
Why Is Bitcoin Falling?
If the Fed cannot reduce inflation, it will keep interest rates higher for longer. There is also a risk of additional rate hikes. However, today’s 0.4% monthly wage increase and the Non-Farm Payroll report exceeding expectations by around 100,000 disrupted things. Investors expecting a relaxation in the employment front due to JOLTS were shocked by the 272,000 non-farm payrolls announced against the 180,000 expectation.
BTC fell by nearly $1300 at the time of writing for this reason. The expectation of a rate cut in September fell from 70% to 55% according to FedWatch data. The fact that the probability of a cut in the upcoming Fed meeting in about 5 days and 5 hours has decreased so much confirms how discouraging the incoming data is.
What Will Happen to Cryptocurrencies?
Most likely, we will see the price quickly drop to $68,500 after being rejected from the $71,800 resistance. If this happens, rapid gains in altcoins are likely to reverse. For example, BNB Coin price might quickly test the $635 resistance from $700. Additionally, altcoins that gained double digits in the recent rise are likely to reverse these gains quickly.
If the US markets open negatively in about an hour, we should see these dark clouds over crypto darken further. Investors should be cautious about the negative volatility expected in the coming hours.
