The crypto market was slightly changed to lighter on Tuesday with Dogecoin (DOGE) and XRP-Falling Fall among greater tokens with losses of just over 3% in the last 24 hours. Coindesk 20 index (CD20), a measure of the wider crypto market, dropped 2%.
The lack of volatility comes as Bitcoin (BTC) traders largely support the federal Open Market Committee (FOMC), which is planned for Wednesday, which can set the tone of monetary policy and affect risk assets, including Cryptocurrencies.
Federal Reserve’s interest on interest – is expected to remain unchanged at 4.25% –4.50% – and any comments from President Jerome Powell to a large extent. A Hawkish attitude, signaling tighter policy or a slower path to rate cuts, can push Bitcoin and lead to more significant losses in altcoins. Conversely, a dovish tilt that suggests future easing could trigger a relief.
“A betting this Wednesday remains very unlikely as the US turns away from fiscal dominance where public spending burned growth, toward [President Donald] Trump’s push for reduction of deficits, “Dealers from QCP Capital traded in a broadcast message on Tuesday.” The shift puts the burden back on monetary policy. Although we do not expect a surprising cut, any Dovish signal from Powell may be the catalyst that sparks on the head.
“Capital may rotate out of Trump-driven momentum trades like Nasdaq and Bitcoin and to a long time overlooked European and Chinese markets. Historically, crypto prices have delayed shifts in global liquidity conditions,” added QCP capital dealers.
AGNE Linger from Wefi noted that wider market volatility remains elevated, with Crypto Fear and Greed Index at 22 – indicating “extreme fear” – as investors are struggling with uncertainties about inflation, trade war and geopolitical tensions.
“In the US, the S&P 500 and NASDAQ composite registered their fourth consecutive weekly fall last week, with Dow Jones dropping by 3.1% to register its worst weekly revenue in about 24 months. While the previous week saw an unusual Drawdown, more uncertainty could be compared to the rest of the month.
At Bitget Research, chief analyst Ryan Lee said Bitcoin stays in a tight interval with a step to either $ 75,000 or $ 90,000 equally likely, based on how dealers respond to the US rate decision.
“Bitcoin’s recent withdrawal has dealers who see key support levels between $ 82,000 and $ 85,000. It’s a classic post-rally consolidation phase that is healthy, but also a test of whether the recent momentum has real residence,” Lee said in an email to Coindesk. “All unexpected FOMC movements could throw a wrench on the market.
“If the mood becomes Bearish, we could see Bitcoin Dip against $ 75,000- $ 80,000, though a bullish macro background could send that climb back to $ 90,000,” he added.
