Glassnode Co-Founders Reveal Reason For Market Volatility After Latest Fed Rate Hike

Glassnode co-founders Jan Happel and Yann Allemann believe Bitcoin (BTC) is staying below the $20,000 price level because of "intense pressure" brought about by a fresh rate hike – to the tune of 75 basis points (bps) – by the U.S. Federal Reserve.

Another interest hike coupled with the hawkish stance of the Fed is overshadowing the fundamental developments, regulatory and technologically, taking place in the crypto industry and as a result, the world's biggest cryptocurrency remains below $20,000, even dipping below $19,000 earlier this month, Happel and Allemann wrote in a report.

"Both the monetary policy and regulatory fronts are offering nothing other than headwinds to crypto," the Glassnode co-founders said.

Additionally, due to an unfavorable macro backdrop, the Glassnode co-founders also believe that a rising volume and a bearish market could cause more pain for Bitcoin holders as such a situation signals a significant selloff.

"Whenever spot volume backs a downward trend, it tends to extend into the near future, and a reversion requires substantial buying pressure," Happel and Allemann added.

The futures traders and investor data is also not optimistic for Bitcoin.

"The futures-to-spot volume ratio is well below one, and since the 50 bps surprise rate hike in June, it has trended downward steadily. This development indicates less confidence and speculation in the system," they said.

The Glassnode executives predicted that Bitcoin will trade in a range of $17,000 to $25,000 in the near future.

"According to J. Powell's remarks, a subsequent 75 bps rate hike, previous FOMC (Federal Open Market Committee) weeks, and the state of the system, Bitcoin likely continues to trade in the $17,000-$25,0000 trading range. Even though the spot market saw an uptick in traded volume, the options and futures market denoted selling pressure amidst a high-risk and bearish regime," they explained.