Crypto Today: Why are Bitcoin, Ethereum, XRP falling as a hawkish Fed tone dampens sentiment?

• Bitcoin retreats to $80,000 on Thursday, weighed down by the Fed’s hawkish stance despite its decision to leave rates unchanged.
• Ethereum’s correction brings it close to the crucial 200-day EMA at $2,316; a close below this level could deepen the decline.
• XRP remains vulnerable to additional losses as it trades below the crucial $1.300 support, should that level fail to hold.

Cryptocurrency sentiment comes under pressure on Thursday, with Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) retreating after the Federal Reserve (Fed) left interest rates unchanged but maintained a hawkish tone. Further losses threaten all three: BTC eases towards $80,000, ETH nears its 200-day Exponential Moving Average (EMA) at $2,316, and XRP remains below support at $1.300.

Why are BTC, ETH and XRP under pressure after the Fed’s hawkish rate hold?

Following its two-day October policy meeting, the Fed kept its policy rate at 3.75%-4.00% on Wednesday, though the decision was not unanimous. Lisa Cook and Beth Hammack were the two officials seeking a 25-basis-point increase. Chair Kevin Warsh, meanwhile, said incoming information would guide the Fed’s assessment of whether additional action was necessary.

At his press conference, Warsh said officials have “made clear our readiness to act as circumstances require, and we have shown our willingness to act.”

Highlighting the inflation mandate, Warsh said: “It’s our responsibility to get inflation down,” and added: “That’s the reason the FOMC’s discussion over the last couple of days focused mainly on the price stability side of our remit,”

Although unchanged rates were already priced in, the hawkish tone and inflation concerns in the Fed’s forward guidance reinforce caution across markets, putting pressure on risk assets such as cryptocurrencies. The CME FedWatch Tool put the probability of tightening at the 9 December meeting at 79.6% on Thursday, a slight increase from Tuesday’s 78.33%. This tilt towards tighter monetary policy provides mild support to safe-haven assets: the 10-year Treasury yield remains above 5%, while the US Dollar Index (DXY) holds above $102. By contrast, risk assets BTC, ETH and XRP fell to $80,000, $2,300 and $1.300, respectively, on Thursday.

Adding to the pressure on the wider crypto market, Thursday’s stronger-than-anticipated growth figures and persistent inflation readings lend further support to the USD.

September’s annual US Personal Consumption Expenditures (PCE) inflation reading rose to 3.6% YoY from 3.4% in August, in line with market forecasts. On a monthly basis, PCE increased by 0.5%, compared with the previous 0.3%. Excluding volatile food and energy prices, core PCE advanced 3.1% year-on-year and 0.3% month-on-month. The first estimate from the US Bureau of Economic Analysis (BEA), also released on Thursday, showed US Gross Domestic Product (GDP) expanding at an annual rate of 3.4% in the third quarter. That exceeded the market forecast of 3.2% and followed growth of 2.2% in the second quarter.

What do Bitcoin ETF inflows, Ethereum outflows and muted XRP demand signal?

Demand for digital asset investment products has been uneven this week so far. On Wednesday, spot Bitcoin ETFs attracted $137.33 million, according to SoSoValue, marking the third consecutive week of inflows. The daily inflows recorded thus far point to modest institutional buying, although their smaller size compared with last week suggests investors remain cautious.

Institutional appetite for ETH, by comparison, appeared to weaken. Wednesday brought modest outflows of $21.41 million from spot Ethereum ETFs, SoSoValue figures showed, extending withdrawals to a third consecutive day. 

For XRP, institutional activity was subdued on both Wednesday and Tuesday. This followed a modest $3.61 million outflow on Monday, pointing to waning demand and interest among traders.

Technical analysis: Can Bitcoin find support as momentum weakens?

At $80,227 on Thursday, Bitcoin remains above its 100-day and 200-day Exponential Moving Averages (EMAs), positioned at $77,866 and $76,435, respectively. Its 50-day EMA at $80,802, however, continues to limit gains.

The near-term outlook therefore ranges from neutral to bearish. A decline in the Relative Strength Index (RSI) to 43 points to weakening upward momentum, while the Moving Average Convergence Divergence (MACD) stays negative, below the zero line. Together, these signals indicate diminishing bullish pressure, even though the broader uptrend retains its foundation above the longer-term EMAs.

Any recovery would first encounter resistance at the 50-day EMA around $80,802. Beyond that lies the horizontal $85,000 barrier, where selling seen previously could return.

Should prices decline, the 100-day EMA near $77,866 offers the first significant support, followed by the stronger structural floor at the 200-day EMA around $76,435. A daily close beneath these levels would strengthen the bearish outlook and leave scope for a sharper correction.

Technical analysis: Can Ethereum hold its floor as XRP loses support?

Trading at $2,320, Ethereum continues to show a bearish near-term bias. It is barely holding support at the 200-day EMA of $2,316 after slipping just below the 100-day EMA at $2,361 and the 50-day EMA at $2,445. ETH  has also retreated below the previously broken ascending trendline reference around $2,360, with the horizontal $2,400 barrier still restricting gains. Meanwhile, an RSI near 35 remains subdued. Alongside a negative but improving MACD line, it points to weak downside momentum that is stabilising, rather than a convincing shift towards a bullish trend.

Immediate downside support lies broadly around the current trading area, underpinned by the 200-day EMA at $2,316. Further below, the horizontal level near $1,823 provides a deeper structural floor.

A recovery would initially face the former trendline and short-term pivot around $2,360, before reaching the horizontal barrier at $2,400. Holding a break above both would bring the 50-day EMA at $2,445 into view, with the higher resistance region near $2,770 beyond it.

At $1.292, XRP retains a bearish near-term outlook, with the spot price below every key Exponential Moving Average (EMA). Overhead resistance is layered across the 100-day EMA at $1.332, the 50-day EMA at $1.357 and the 200-day EMA at $1.371. Recoveries remain vulnerable while XRP trades beneath this cluster.

Momentum indicators offer a mixed picture. An RSI reading of 40 remains weak and below neutral, whereas the MACD has only just edged into positive territory. This suggests tentative stabilisation efforts, not a confirmed bullish reversal.

For any upward move, the nearby horizontal $1.300 level presents the first resistance, followed by the 100-day EMA near $1.332 and the 50-day EMA at $1.357. The 200-day EMA at $1.371 adds a broader ceiling to the corrective move, before higher resistance at $1.540 and $1.900. The current dataset identifies no significant support below the prevailing price. Consequently, an extended decline would leave XRP vulnerable to renewed selling until fresh demand zones take shape on the chart.

(The technical analysis of this story was written with the help of an AI tool. Know more.)