The cryptocurrency market has been on tenterhooks as the Federal Open Market Committee (FOMC) gears up to announce its decision on interest rates. Bitcoin, the leading digital currency, experienced a pullback from its recent highs on Wednesday, ahead of the anticipated announcement.
Despite inflation rates in August surpassing expectations, market analysts widely believe that the Federal Reserve will maintain the current interest rates.
As the market braces for the much-anticipated Federal Reserve interest rate decision, Bitcoin opened slightly lower. After reaching a peak of $27,488.76 the previous day, Bitcoin dipped to an intraday low of $26,918.32 on Wednesday.
One of the catalysts for this decline was the Relative Strength Index (RSI), which fell below the 60.00 mark. The index is currently hovering around 57.08 and is moving towards the 55.00 support level. Despite today’s decline, the overall momentum remains bullish, with the drop largely attributed to profit-taking ahead of the Federal Reserve’s statement.
Ethereum(ETH), the second-largest cryptocurrency by market cap, also experienced a decline in its trading session. This can be attributed to traders opting to take profits. After reaching a high of $1,669.02 on Tuesday, ETH/USD dropped to an early low of $1,621.36. This decline pushed the cryptocurrency close to the $1,620 support level. However, prices rebounded due to bullish resistance, and at the time of writing, Ethereum was trading at $1,631.
The crypto market’s trading volume has hovered around $1.08 trillion in the past day. As the FOMC decision looms, the trading range is narrowing.
However, it’s essential to note the early pressure on the markets on Wednesday and the intensification of cryptocurrency selling as the cap approached $1.09 trillion. Bitcoin faced resistance at $27.4K, and attempts to break above the 50-day moving average for the third consecutive day met with significant resistance.
All financial markets are adopting a wait-and-see approach, especially with monetary policy decisions pending in major economies like the US, Switzerland, the UK, and Japan. If one were to solely consider the technical chart, Bitcoin’s situation appears bearish. The corrective bounce in BTC seems to be over, with prices falling below moving averages, and the short-term oversold condition has been rectified.
Trading volumes on the Binance exchange have reportedly decreased by 57% over the past week. This decline is attributed to users migrating to other trading platforms that haven’t faced regulatory crackdowns. Despite this, the court refrained from ordering Binance’s US unit to provide the SEC with more details about handling customer funds. Instead, both parties were urged to collaborate.
SEC Commissioner Esther Pierce has encouraged cryptocurrency companies to remain in the US. She expressed her frustration over the agency’s hesitancy to clarify cryptocurrency regulations. The surge in applications to launch spot bitcoin ETFs is rejuvenating the crypto market, potentially acting as a catalyst for Bitcoin’s growth.