Cryptocurrencies Falter Ahead Of Fed's Decision

Crypto market capitalization decreased on an overnight basis in the run-up to another Federal Open Markets Committee decision due on Wednesday afternoon. Most of the cryptocurrencies appeared overwhelmed by fears of the Fed’s stance now as well as going forward.

The Federal Reserve is widely expected to skip a rate hike but anxiety lingers over the tone and language of the Fed’s monetary policy commentary. Hawkish stance by the Fed has often bolstered the U.S. Dollar, diminishing the appeal of risky assets including cryptocurrencies.

Despite expectations of a pause by the Fed in this review, markets fear the Fed would keep interest rates restrictive and higher for longer to win the fight against inflation. The CME FedWatch tool shows expectations of a rate cut only in the Fed’s review in January. Based on the views of interest rate traders, the likely probabilities of a rate cut are as low as 1.2 percent in January, rising to 14.3 percent by March, 34.4 percent by May and 52.6 percent by June 2024.

Amidst the anxiety, the Dollar Index, a barometer of the Dollar’s relative strength shed 0.19 percent to trade at 105.00.

Market capitalization of cryptocurrencies as a whole decreased to $1.07 trillion from $1.08 trillion a day earlier. Despite anxiety ahead of the Fed’s review, it indeed has been a positive week for crypto markets. Of the top 100 cryptocurrencies, only 11 have lost 1 percent or more in the past week.

Bitcoin breached past $27,400 after a gap by of close to 3 weeks. It is however currently changing hands at $27,097, declining 0.15 percent in the past 24 hours.

Ethereum dropped 0.83 percent overnight to trade at $1,629.98, amidst rumors of large transfers of ETH to exchanges by whales that could potentially imply an imminent sale.

4th ranked BNB (BNB) shed 0.86 percent in the past 24 hours. The cryptocurrency has gained 1.9 percent in the past week but is yet to recover more than 11 percent losses incurred in 2023.

5th ranked XRP (XRP) added 1.2 percent in the past 24 hours. The cryptocurrency has gained close to 7 percent in the past week and more than 51 percent in 2023.

7th ranked Cardano (ADA) slipped more than 1 percent overnight. Year-to date losses still exceed 1 percent.

8th ranked Dogecoin (DOGE) shed half a percent in the past 24 hours. Gains of more than 1 percent in the past week has helped the meme crypto to limit year-to-date losses at 11.5 percent.

Toncoin (TON) which recently moved to the 9th rank overall, recorded overnight gains of 0.2 percent. TON has gained 29 percent in the past week and 8 percent in 2023, helped by a recent partnership with the Telegram messaging app.

10th ranked Solana (SOL) slipped 0.40 percent in the past 24 hours. Weekly gains are close to 11 percent, but the cryptocurrency has gained 101 percent in 2023.

45th ranked XDC Network (XDC), 36th ranked Maker (MKR), 75th ranked Conflux (CFX), 73rd ranked KuCoin Token (KCS) and 100th ranked Flare (FLR) have all gained more than 2 percent in the past 24 hours.

76th ranked ApeCoin (APE), 87th ranked Gala (GALA) and 15th ranked Litecoin (LTC) shed more than 3 percent in the past 24 hours.

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