The crypto market crashed today, Nov. 3, as a risk-off sentiment continued and as a senior Federal Reserve official warned about interest rates in the United States.
Summary
- The crypto market could crash further amid concerns about the Federal Reserve.
- Austan Goolsbee and Jeff Schmid have warned about inflation and interest rate cuts.
- Bitcoin has also formed a death cross and a head-and-shoulders pattern.
Bitcoin (BTC) price crashed to $106,000 as it neared moving into a technical bear market. Altcoins had a worse performance, led by top tokens like Aster, Virtuals, Aerodrome Finance, and Artificial Superintelligence Alliance, which tumbled by over 15%.
Austan Goolsbee warns on inflation and interest rates
Bitcoin and most altcoins have been under pressure since the Federal Reserve delivered its interest rate decision on Wednesday last week.
In that meeting, the bank decided to slash interest rates by 0.25% as it remained concerned about the labor market, which has deteriorated in the past few months. It also said that it would end the quantitative tightening process.
Bitcoin and the crypto market dropped after the rate cut because Jerome Powell hinted that a December rate cut was not guaranteed. Since then, the odds of a rate cut in December have dropped to 67% from 96% last week.
The crypto market continued falling today as Austan Goolsbee, the head of the Chicago Fed said that he was more concerned about inflation than the labor market. He said:
“I am nervous about the inflation side of the ledger, where you’ve seen inflation above the target for four and a half years and it’s trending the wrong way.”
Some other Federal Reserve officials have warned about inflation in the past few months, with Kansas City’s Jeff Schmid being the most vocal. In his dissent last week, he said that the labor market was balanced, economic growth steady, and inflation too high.
These statements came as a report by the Institute of Supply Management showed that the US manufacturing sector contracted for the eighth straight month.
Crypto market at risk as Bitcoin price forms a death cross
Meanwhile, technicals suggest that Bitcoin price could be at risk of more downside, which may drag the broader crypto market.
It has already formed a death cross pattern as the 50-day and 200-day Weighted Moving Averages have crossed each other.
The coin has also formed a head-and-shoulders pattern and is about to move below the 38.2% Fibonacci Retracement level.
Bitcoin price has also moved below the strong, pivot, reverse level of the Murrey Math Lines tool. Therefore, the coin will likely continue falling, potentially below $100,000 as James Wynn predicted.
A strong Bitcoin price crash will drag other coins lower. In most cases, altcoins experience a deeper crash whenever Bitcoin falls.
