Cryptocurrencies Dip as Investors Await Fed's Interest Rate Decision

On Sunday, major cryptocurrencies experienced a decline as investors prepared for the Federal Reserve's upcoming decision on interest rates. The cryptocurrency market is particularly sensitive to these announcements, and this week’s meeting is expected to influence market trends.

Cryptocurrency	Gains +/-	Price (As of 8:30 p.m. ET)
Bitcoin BTC/USD	-1.60%	$82,939.09
Ethereum ETH/USD	-2.00%	$1,899.03
Dogecoin DOGE/USD	-3.62%	$0.1701

What Happened: Bitcoin had a turbulent trading day, fluctuating between $85,000 and $82,000. The leading cryptocurrency managed to rebound slightly last week, gaining 2.21% overall.

However, Bitcoin's performance in the first quarter shows a drop of over 11%, which is stark compared to its average returns of 51% in other periods.

Meanwhile, Ethereum hovered between $1,860 and $1,930 during Sunday, facing a weekly decline of over 7%. Its quarterly losses have now increased to 42%.

In the last 24 hours, approximately $256 million was liquidated from the cryptocurrency market, primarily due to long liquidations that accounted for $177 million.

Bitcoin's Open Interest fell by 2.76% within the same timeframe, reflecting the impact of these long liquidations. Despite this, 52% of traders have taken long positions on Bitcoin, indicating a willingness to buy at current prices.

The market sentiment remains cautious, as indicated by the Crypto Fear and Greed Index, which points to a prevailing sense of fear among traders.

Top Gainers

Cryptocurrency	Gains +/-	Price (As of 8:30 p.m. ET)
BinaryX (BNX)	+26.13%	$1.41
Helium (HNT)	+3.38%	$3.20
OKB (OKB)	+3.32%	$48.08

The overall market capitalization for cryptocurrencies has decreased by 2% in the past day, bringing it to approximately $2.71 trillion.

Stock futures echoed this cautious sentiment, with the Dow Jones Industrial Average Futures dropping 156 points or 0.37% as of 8:45 p.m. EDT. Similar declines were seen for the S&P 500 and Nasdaq 100 Futures.

Looking ahead, the Federal Reserve’s policy meeting this week is a key focus. Based on the CME FedWatch tool, the central bank is largely anticipated to keep the interest rates steady.

Market Insights

Renowned cryptocurrency analyst Ali Martinez identified $81,400 as a significant test for Bitcoin. If it stays above this threshold, an upward trajectory for Bitcoin may continue. Martinez also observed a potential ascending triangle pattern for Bitcoin, suggesting that a sustained close beyond the $84,500 mark could yield an 8% rise in value.

Another expert, Michaël van de Poppe, projected a "strong and green" week for cryptocurrencies if altcoins do not experience a major dump on Monday. This week appears pivotal for market participants.

As of now, the market has not experienced a significant dump on Sunday, sparking cautious optimism.

Overall, next week presents a potentially important period for cryptocurrencies, with high hopes that the market might recover if selling pressure on altcoins eases.

Image via Shutterstock

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cryptocurrency, Bitcoin, Ethereum