Bitwise CIO: BTC Pullback Is Short-Term, Broader Bullish Trend Remains Intact
In Brief
Bitwise’s Matt Hougan shared his thoughts on the recent Federal Reserve rate hike revision announcement, noting that it won’t disrupt broader crypto market trends.
Chief Investment Officer at cryptocurrency index fund manager Bitwise, Matt Hougan, shared his thoughts on the recent Federal Reserve announcement of a 25-basis-point rate cut and a revision of its rate hike expectations for next year, reducing them from four to two.
As he pointed out, this shift has triggered a notable pullback in risk assets. The S&P 500 dropped by 3%, while the riskier Russell 2000 Small Cap Index fell 4.4%. Bitcoin experienced a larger decline, dropping from around $106,000 earlier in the day to below $99,000, though it has since seen some recovery.
At the time of writing, Bitcoin is trading at $101,747, marking a 2.4% decrease in the last 24 hours. Its low and high over that period were $99,047 and $105,298, respectively.
However, Matt Hougan noted that in the cryptocurrency market, sharp pullbacks don’t necessarily represent the end of the story. Leverage plays a major role, and when markets see abrupt drops, leveraged positions often get liquidated. In today’s market, $600 million in leveraged long positions were wiped out, intensifying the pullback.
Matt Hougan Calls Current Crypto Setback Temporary, Citing Broader Positive Market Trend
According to Matt Hougan, this pullback is likely just a temporary setback rather than a reversal.
The Federal Reserve’s influence on cryptocurrencies has diminished compared to the past. The cryptocurrency market now has its own internal momentum, and today’s announcement doesn’t seem to disrupt the broader trends, he argued. These include the growing shift in Washington’s stance toward cryptocurrencies, increasing institutional adoption, exchange-traded funds (ETF) inflows, Bitcoin purchases by governments and corporations, and technological advancements in the blockchain space.
Bitwise CIO also highlighted that his preferred momentum indicator remains positive: Bitcoin’s 10-day exponential moving average, around $102,000, is still above its 20-day exponential moving average, which is around $99,000. This simple measure has historically been a reliable indicator of market trends.
Cryptocurrency remains in a multi-year bull market, and a 50 basis point rate cut is unlikely to alter that, he added.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
