Bitcoin and cryptos remain calm, as they patiently await Powell and Fed
There´s a tense calm in the cryptocurrency market. Bitcoin (BTC) moderates its recent rises and is just above $27,000 before the Federal Reserve (Fed) announces its next monetary policy decision. Meanwhile, Ethereum (ETH) corrects a bit and stands at around $1,630.
Analysts believe that the session will remain on hold until the U.S. central bank makes its decision. The consensus virtually assumes that the Fed will not touch interest rates (99% probability according to data from CME's FedWatch tool) and points to the Fed's forecasts as the main point of interest for the day. Depending on what they say, the market could change its stance, as it now barely sees another hike coming for the remainder of the year.
Numerous analysts defend the thesis that the Fed has reached the end of its hiking cycle, although they also stress that the data could give Chairman Jerome Powell and his ilk the justification to adopt a more hawkish stance. "The country is going to face a dangerous triad: consumption that should slow sharply over the coming months, a reduction in fiscal stimulus and a labor market that is beginning to crack," they explained from La Financière de l'Echiquier.
Christian Scherrmann, an economist at DWS, expects Powell to point out that the stance is "sufficiently restrictive" and that "given the longer-than-expected delays in monetary policy, higher rates may be needed for longer" to bring inflation to the 2% target. "He is also likely to mention upside risks to inflation again, which will keep the Fed data-dependent. This is likely to keep market expectations high for another rate hike at the November meeting. On the other hand, we do not expect the Fed to continue to raise rates and anticipate the first downward adjustment in the second quarter of 2024," he added.
On the other hand, the market continues to receive headlines coming from the FTX case. Yesterday, on Tuesday, the bankrupt cryptocurrency exchange sued the parents of founder and former CEO Sam Bankman-Fried, Joseph Bankman and Barbara Fried, to "recover millions of dollars in fraudulently transferred and misappropriated funds" by the firm. According to the complaint, "FTX Trading paid $18,914,327.82, inclusive of taxes, fees, and costs, for Blue Water, to which Bankman and Fried received title, as well as various expenses related to Blue Water totaling more than $90,000."
Similarly, the Department of Justice (DOJ) reportedly asked the investigating judge in the case to include additional dates in the first week of the trial to guarantee witness appearances and ensure an efficient pace of the process. The SBF trial is scheduled to begin on October 3 with jury selection, which could take up most of the day. This would leave only two trial days left in the week leading up to the Columbus Day holiday, which falls on October 9. Therefore, the DOJ is asking the judge to include October 6 in the first week of the trial.
On the other hand, Rania Gule, market analyst at XS.com, noted that the market is poised for the "altcoin season," where "meme coins emerge as strong contenders in the markets, poised for significant price increases." "Currently, I believe that Shiba Inu (SHIB) and Pepe Coin (PEPE) are strong cryptocurrencies, attracting investors worldwide," explained Gule.
Similarly, the expert pointed out that the Qubeta (QUBE) project has taken the lead among those interested in cryptocurrency markets, generating significant buzz with its upcoming Initial Coin Offering (ICO), which is expected to register astonishing gains of up to 8000%. "It is a pioneer in the encrypted artificial intelligence revolution, aiming to bridge the gap between emerging AI companies and enthusiastic investors.I believe that such a project will create price waves in the world of cryptocurrencies, especially Bitcoin," she added.
In other market news, there´s restraint. Most altcoins are trading slightly higher, although XRP rises around 2% and Toncoin (TON) soars 2.7%.