Yesterday, Fed has increased the interest rates by 0.5% to 1%. Moreover, the Fed has also stated that it is planning to start with quantitative tightening of its balance sheet. This message should have had a negative effect on the markets, but that did not happen. The markets already knew that the Fed was planning to increase the interest rates by 0.5%, which is why the markets did not panic.
Rather clear daily chart
Looking at the daily chart, the capitalisation of altcoins was just touching the lower trendline of the whole channel. Yesterday was thus very important for the overall picture, since there was a decision to be made about whether the structure will continue, or whether altcoins will break out of the structure.
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But, we have seen a bounce from the trendline and what can follow is a move to the middle of the channel. The first resistance can come right there at around 1.10 trillion dollars, where again the altcoins will need to decide whether to continue the upward movement more or whether to retrace back.
1D chart of altcoin capitalisation, Source: Author’s analysis, tradingview.com
What can happen in the near future?
The 4-hour chart then provides a better understanding of what can happen in the coming days, where the upside potential seem promising. For the coming hours, altcoins might be retracing a bit lower after yesterday’s run ups, but overall, the rise in the price seems to be more prevalent. Each retracement down should thus be expected to be followed by a stronger upside move.
4-hour chart of altcoin capitalisation, Source: Author’s analysis, tradingview.com
The strong upside move that the altcoins showed in the hours following the FOMC meeting showed that the altcoins are ready to rise, which is where I would expect them to be heading in the coming weeks.