Bitcoin (BTC) tightened its grip on the crypto market on Tuesday, where the dominance waves to fresh four-year high as crypto traders rotated on the market’s anchor active ahead of tomorrow’s most important Federal Reserve policy meeting.
BTC steadily kept around $ 94,000- $ 95,000 area, up a modest 0.4% over the last 24 hours and extended a tight reach trading pattern that has been lasting since the weekend.
Meanwhile, the broad market of Coindesk 20-index slid 0.7% lower, with Ethereums ether (ETH) and native tokens of Sui (Sui), Aptos (APT) and Polygon (Poly), which pulled the benchmark lower.
A control in traditional markets showed shares booking back-to-back losses with the S&P 500 and the tech-heavy Nasdaq that closed 0.7% -0.8% down and underpinned BTC again.
Despite the lack of major price actions, Focus has increasingly turned to Bitcoin’s growing proportion of the overall crypto market: the so-called Bitcoin dominance metrics exceeded 65%, its highest reading since January 2021, according to trade viewing data, signaling capital, which consolidated to the asset, which was perceived as the most resistant in the face of macro-Economics. Uncustain.
Joel Kruger, market strategist at LMAX Group, described the current landscape as one of the break and expectation. “The Cryptocurrency Market has remained largely stagnant since the weekly open, with prices settling in a team pattern when investors are waiting for a central catalyst,” he noted. “This driving force can arise as a result of traditional markets, driven by updates on customs-related financial effects or Federal Reserve’s expected FOMC decision on May 7.”
The Federal Reserve is expected to have interest rates steadily, according to the CME FedWatch tool, but dealers are at odds for any shift in bold president Jerome Powell’s tone that can affect the risk appetite.
Bitcoin -Volatility burst on the horizon
Since Bitcoin’s recent price action is extremely flat, the upcoming FOMC meeting is “rigged to cause significant volatility,” said Vetle Lunde, head of research at K33. He noted in a Tuesday report that BTC’s short-term volatility is “abnormally compressed”, with the 7-day average falling to the lowest level last week in 563 days.
“Such low volatility regimes in BTC tend to be short -lived,” Lunde said. “Violent volatility outbreaks typically follow this kind of stability when prices start moving as geared trades are unclear and dealers are re -enabled on the market.”
He said that a significant cascade is lower is unlikely, as the financing rates for eternal swaps are consistently negative. Similar periods offered historically good shopping opportunities for middle and long-term investors, added Lunde, which favored “aggressive spote” ahead.
