Market Overview
Bitcoin surged above $94,400 on Tuesday, reaching its highest level since mid-November. This significant climb occurred as traders positioned themselves ahead of the Federal Reserve's policy announcement scheduled for Wednesday. The cryptocurrency saw a 5% increase over a 24-hour period, following several days where it hovered near the $90,000 mark.
Altcoin Performance
Altcoins demonstrated stronger performance than the broader market during Tuesday's rally. Ethereum, in particular, jumped 8% to reach $3,359, extending its weekly advance to over 16%. This gain marked the most substantial among the top 10 cryptocurrencies within that timeframe.
Other notable altcoin movements included XRP, which added 5% to trade at $2.17. Solana rose 6% to $144, and Dogecoin climbed 6% to $0.15. These movements occurred as the Federal Open Market Committee convened, with strong expectations for a third consecutive rate reduction.
Interest Rate Expectations and Market Impact
Data from CME FedWatch indicates that interest rate traders are pricing in a nearly 90% probability of another 25-basis-point cut. Historically, low-interest-rate environments tend to support Bitcoin and other risk assets. However, Tuesday's market strength may also be attributed to traders buying in anticipation of the upcoming announcement.
Liquidation Data
CoinGlass data recorded $376 million in liquidated positions over the past day. Short positions constituted $297 million of this total, reversing a trend observed in recent months where falling prices primarily impacted long positions. Bitcoin accounted for approximately $153 million of these liquidated positions, with Ethereum contributing $110 million.
A concentrated four-hour window saw short liquidations exceed $260 million, representing one of the largest instances of forced buying episodes in recent weeks.
Regulatory Developments
On Tuesday, the Office of the Comptroller of the Currency released Interpretive Letter No. 1188. This clarification stated that national banks are permitted to conduct riskless principal transactions in crypto assets. These transactions enable banks to act as intermediaries for trades between customers without the need to hold their own inventory.
Analyst Outlook and Legislative Momentum
Analysts at Standard Chartered have revised their year-end Bitcoin target downwards to $100,000, while maintaining a positive long-term outlook. The bank characterized the current market conditions as a "cold breeze" rather than a full "crypto winter."
In parallel, Senator Kirsten Gillibrand informed reporters that there are no current obstacles preventing the passage of pending market structure legislation. Negotiators are reportedly working towards completing a draft this week, indicating building momentum on Capitol Hill.