Bitcoin Surges 3%; Traders Eye FOMC Outcome
By Laxmikant Khanvilkar
Bulls have taken control of cryptocurrencies just in time, ahead of the Federal Open Market Committee decision on interest rates later this week. The optimism around slowdown in the pace of rate hike has boosted traders sentiment, which reflects in leading cryptocurrencies posting strong gains.
Bitcoin (BTC) has advanced towards the $24,000 mark. The largest cryptocurrency by market capitalization recently changed hands at around $23,700 for the day.
Ethereum, on the other hand, is on course to top $1,700.
It’s been a roaring start to 2023 for bitcoin, which has surged in price by more than 40% since New Year’s Eve. BTC surpassed $23,000 for the first time since mid-2022 about a week ago and has managed to stay in that territory.
Meanwhile, the crypto market cap has risen by 3.06% in the past 24 hours to reach $1.08 tn, while the volume has seen an increase of 42.83% to reach $52.34 bn. DeFi’s volume is at $3.64 bn, representing 6.95% of the total market, while stable coins make up 89.19% of the total market volume with $46.68 bn. Bitcoin’s dominance has grown by 0.04% to 42.37%.
The crypto rally came after the latest Personal Consumption Expenditures (PCE) report showed a slowdown in inflation at the end of last year – a goal the Fed has been aiming for with rate hikes.
Certain key aspects of the economy suggest that the Fed is set to achieve its target of soft landing. Commodity prices are down and US rates and the dollar have also weakened. If the Fed confirms rate cuts for 2023, this could lead to a steady rally and bolster risky assets investment appeal.
The CME FedWatch tool currently shows that traders see roughly a 99% chance the FOMC will raise rates by 25 basis points (0.25 percentage point) at its February meeting.
Analysts remain optimistic about BTC price movement this week.
“Bitcoin should still consolidate leading up to the Federal Open Market Committee (FOMC) decision, with risks to the downside if the Fed sticks to its hawkish mantra,” Edward Moya, senior market analyst at foreign exchange Oanda, wrote in a Friday note about the Federal Reserve’s rate-setting unit.
Some have aired cautious opinions as well. Joel Kruger, markets strategist at crypto exchange LMAX Digital, said that from a technical standpoint the price of BTC is currently overbought, as seen by the daily relative strength index (RSI) that measures the magnitude of recent price changes.
Elsewhere, traditional markets were also slightly up, with the S&P 500 Index up about 0.3%.
You need to login in order to Like
