Crypto Daybook: Dour Mood in BTC and ETH Ahead of Fed Meeting

The cryptocurrency market is experiencing a cautious atmosphere as traders prepare for the Federal Reserve's upcoming interest rate decision. Bitcoin and Ethereum have both seen declines, reflecting a broader trend of derisking in anticipation of the Fed's announcements regarding future rate cuts and economic forecasts.

Key Takeaways

• Bitcoin and Ethereum are down nearly 2% ahead of the Fed meeting.

• The Fed is expected to announce a 25 basis-point rate cut, but with fewer cuts projected for 2025.

• The PENGU token from the Pudgy Penguins ecosystem has plummeted over 50% since its recent airdrop.

Market Overview

The crypto market is currently in a state of derisking as investors brace for the Federal Reserve's interest rate decision. Bitcoin (BTC) is trading around $103,750, marking a 2% drop for the day after reaching a record high of over $108,000 just a day prior. Ethereum (ETH) is also feeling the pressure, with similar declines observed.

The anticipated rate cut by the Fed is expected to be 25 basis points, bringing the target range to 4.25% to 4.5%. However, analysts predict that the Fed will signal fewer rate cuts for 2025 than previously expected, which has contributed to the current bearish sentiment in the market.

PENGU Token's Struggles

The Pudgy Penguins' PENGU token has faced significant challenges since its launch, dropping over 50% following a highly publicized airdrop. The initial excitement surrounding the token led to a surge in buying, but low liquidity has resulted in extreme price volatility. Some early investors have reported catastrophic losses due to the token's unstable market conditions.

Implications of Fed's Decision

The Federal Reserve's decision is set to be announced at 2:00 PM ET, followed by a press conference at 2:30 PM ET. The market is closely watching for any signals regarding future rate cuts and economic growth projections. Analysts suggest that if the Fed maintains a data-dependent approach and eases concerns about inflation, risk assets, including cryptocurrencies, could see a rebound.

What To Watch

• Crypto Events: The software cryptocurrency wallet maker Exodus Movement (EXOD) will start trading on NYSE American today.

• Macro Events: The Fed's interest rate decision and economic forecasts will be released at 2:00 PM ET.

Market Movements

• Bitcoin (BTC): Down 1.72% to $104,593.98

• Ethereum (ETH): Down 1.44% to $3,876.29

• CoinDesk 20 Index: Down 3.03% to 3,830.21

Conclusion

As the crypto market navigates a period of uncertainty ahead of the Fed's decision, traders are adopting a cautious stance. The outcomes of today's meeting could significantly influence market sentiment and the trajectory of cryptocurrencies in the coming weeks. Investors are advised to stay alert and prepared for potential volatility as the situation unfolds.

Sources

• Crypto Daybook Americas: Pre-Fed Dour Mood Seen in BTC, ETH, Liquidity Squeeze Hits PENGU, CoinDesk.

• Bitcoin (BTC) Cools Off a Breather After Doji Candle in a Cautious Pre-Fed De-Risking, CoinDesk.