Bitcoin oscillating ahead of Fed decision
by Laxmikant Khanvilkar
The virtual digital assets (VDA) are consolidating, after experiencing a’flash crash’ in the previous session, as market participants await the Federal Reserve decision on interest rate – the last meet for 2023.
Bitcoin (BTC), the largest cryptocurrency by market capitalisation, gyrated between $42,000 and $40,200 before stabilising to current level of $41,411, down 0.4%. Ether (ETH), the second largest cryptocurrency, followed bitcoin lower and was recently trading at $2,202, losing 1.32% in the same period.
BTC experienced panic selling in the previous session as the long position holders in the derivatives markets were forced to liquidate their positions. Higher funding rate on the Perpetuals or futures with no expiry, made the situation uncomfortable for the traders.
All eyes are now on the US Federal Reserve, which is widely expected to hold Fed fund rates steady at 5.25%-5.5%, concluding the Federal Open Market Committee (FOMC) meeting, later today, as Consumer Price Index (CPI) inflation continued to edge lower in November.
Bank of England (BoE) and European Central Bank too expected to keep interest rates at their current levels to ensure inflation fall back from the highest levels in decades.
Elsewhere, the rally in altcoin continued unabated. Native tokens of Polkadot (DOT), Cosmos (ATOM) and Injective (INJ) were among the best-performing crypto majors, gaining 10%-20% over the past 24 hours.
Interestingly, the global crypto market cap decreased by 0.5% to $1.56 trillion in the last 24 hours. Similarly, the total crypto market volume dropped 29.3% to $69.3 billion. Total volume in DeFi is currently $8.5 billion, and all stablecoins are $62.3 billion, representing 12.2% and 89.8%, respectively, of the total crypto market 24-hour volume. Bitcoin’s dominance is currently 51.8%, down 0.15% over the day.
The IC15 index, the barometer of the top fifteen tokens, eased 0.6% to 52,487.
Meanwhile, BlackRock has altered the structure of proposed spot bitcoin ETFs, which would enable authorized participants (APs) to create new shares in the fund with cash, rather than only with cryptocurrency, essentially opening the door to banks who cannot hold crypto directly. JPMorgan, Goldman Sachs, others are likely to act as APs to BlackRock’s ETF.
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