Bitcoin maintains its narrow trading range, lingering around $114,000 as markets anticipate the U.S. Federal Reserve’s upcoming interest rate announcement. Investors are expecting a possible second rate reduction this year, which might lower the benchmark rate to between 4.00% and 4.25%. Meanwhile, several notable altcoins, including Ethereum, Solana, and BNB, have experienced a downturn of approximately 2%, with Dogecoin also seeing a decrease.
What Will the Fed Decide This Week?
In its FOMC meeting on October 28-29, the Fed is anticipated to cut rates by 25 basis points. As inflation exceeds targets, the central bank appears to be shifting towards a strategy centered on data-driven monetary easing. According to Lacie Zhang of Bitget Wallet, this cautious expansion of liquidity by Jerome Powell, the Fed’s Chair, is raising interest in bonds and intensifying risk appetite.
How Are Bitcoin and Altcoins Performing?
As the Fed grapples with delayed economic data due to a partial government shutdown, decisions are increasingly influenced by private sector information. Indicators like the ADP employment report are becoming focal points for Powell, which is potentially dampening unexpected policy shifts and stabilizing cryptocurrency volatility.
Over the weekend, Bitcoin leaped from $104,800 to $116,000, bolstering a 5.8% weekly gain. Monday, however, saw prices retreat to $114,000 due to profit-taking. Zhang highlights a climb in open positions from $25 billion to $30 billion but warns of liquidation risks below $110,000. Despite this, leverage increase has supported Bitcoin’s recent rise.
Data from CoinGlass suggests that futures open positions and funding rates remain high yet balanced. Alex Kuptsikevich of FxPro points out Bitcoin’s reliance on the 200-day moving average for support, with the $117,000-$120,000 range posing a resistance challenge. The overall cryptocurrency market value stands steady at $3.9 trillion, consistently surpassing 50- and 200-day moving averages.
The altcoin market is witnessing mixed outcomes. According to CryptoAppsy, ETH has fallen to $4,115, SOL to $202, and XRP to $2.65, with DOGE dropping by 3%. TRX showed a decrease of 1.4% over the last day. On-chain signals indicate that long-dormant BTC is being moved, hinting that early Bitcoin participants might be seizing profit-taking opportunities.
Significant points include:
- •Anticipation surrounding the Fed’s rate decision, potentially affecting markets.
- •Volatility reduction in cryptocurrencies due to focused policy indicators.
- •Bitcoin exhibiting stability and leverage-driven rises, despite profit-taking.
- •Altcoins experiencing mixed performance with notable declines in some assets.
With these dynamics unfolding, the cryptocurrency market remains vigilant, especially as stakeholders eagerly await the Federal Reserve’s decision, which could steer market trends in the upcoming days.