Bitcoin prices are in flux this Wednesday in anticipation of the US Federal Reserve’s interest rate announcement this evening (around 7pm UK time).
A positive Tuesday session closed the BTC/USDT pair 2% higher at US$28,670, with an incremental retraction back to US$28,400 observed in this morning’s Asia trading window.
Up or down for bitcoin? – Source: currency.com
Coinglass data shows a pretty even spread of long and short orders on the futures market, with a fractional buyer-side advantage.
Meanwhile, the Binance BTC/USDT order book shows a sell wall at US$29,000, which could act as a target to overcome for the bitcoin bulls.
The market widely expects the Fed to throw another 25 bps rate hike on the table, bringing the base lending rate to 5.25% and marking to 10th straight increase in borrowing costs.
However, there is a possibility that the doves will win out and put a cork in future hikes altogether, especially given First Republic North’s inevitable takeover.
A dovish surprise could provide the momentum BTC bulls need to push the world’s largest cryptocurrency higher.
One thing to note is the weakness in the US dollar Index (DXY), which has declined a solid half a percent in the past two trading sessions thus providing additional tailwinds to bitcoin.
Ethereum (ETH) closed Monday 2.15% higher at US$1,870, where the ETH/USDT pair has stuck to this morning. Sell pressure remains at the 1.9k price point.
Altcoin off season
While bitcoin and ethereum are in the green on a week-on-week basis, the same cannot be said for large-cap altcoins.
Ripple (XRP), Cardano (ADA), Dogecoin (DOGE), Polygon (MATIC), BNB and most of the other top-20 altcoins have seen low single digits chipped from their market capitalisations.
Tron (TRX) is the one outlier, having added around 5%, but generally speaking, the altcoin market has taken a backseat amid a flight to quality across the volatile cryptocurrency sector.
In the decentralised finance (DeFi) space, derivatives exchange Synthetix (SNX) added around 4% overnight, bringing its market capitalisation above US$632mln.
Though probably a coincidence, SNX’s rally coincides with the launch of Coinbase’s new derivatives exchange in the Bermuda offshore jurisdictions.
Called Coinbase International Exchange, Nasdaq-listed Coinbase chose to launch the exchange offshore to circumvent strict US regulations of crypto derivatives products.
Global cryptocurrency market cap added 1.4% overnight, bringing the total to US$1.18tn, while total value locked in the DeFi space currently stands at US$48.3bn.