Crypto Markets Today: Fed Preview, Bitcoin Holds Steady at $22.9K
1Also: Metaverse tokens surged in January. Equities close higher.
Latest Prices.
Bitcoin (BTC): The largest cryptocurrency by market value was recently trading at about $22,900, up 0.5% over the past 24 hours.
Equities closed higher after the latest data showed Europe’s economy edging up. Investors have also been buoyed by China’s recent economic reopening. Markets are awaiting the Federal Reserve’s Wednesday decision on a potential interest rate increase. The tech-heavy Nasdaq Composite closed up 1.6%, while the S&P 500 and the Dow Jones Industrial Average (DJIA) rose 1.4 and 1%, respectively. The Nasdaq finished its best January since 2001.
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Top Story.
The year 2023 has begun on a positive note, with bitcoin up 40%. The rally could be interrupted by a temporary price pullback as Federal Reserve Chair Jerome Powell is likely to stick to his hawkish script during Wednesday's post-meeting press conference, analysts told CoinDesk.
The Fed began its two-day meeting today and will announce its rate decision at 19:00 UTC on Wednesday. Powell's press conference will follow the rate decision at 19:30 UTC (2:30 p.m. ET).
Having raised rates by 425 basis points (bps) last year that included outsized moves of 75 bps and 50 bps, expectations are firmly centered on the Fed to slow the pace of tightening to 25 bps on Wednesday. In other words, a 25 basis point rate hike is priced in. The focus will be on whether Powell acknowledges the recent softening in inflation and economic activity, bolstering markets' hopes for an early pivot toward easing.
The odds, however, are stacked against such an outcome because the recent rally in stocks and bonds and the decline in the U.S. dollar have eased financial conditions in the economy for the first time since April. That has dented the Fed's effort to counter rampant price pressures in the economy with tighter credit standards.
"There is a strong possibility that in the press conference Powell will be more hawkish and re-tighten financial conditions. For that reason, we could see a healthy short-term correction in crypto and all risk assets," Nauman Sheikh, head of treasury at crypto asset management firm Wave Financial, said.
Sheikh added that the market has run ahead of itself in pricing the so-called Fed pivot despite repeated warnings by the Fed that rates will remain "higher for longer."
Token Roundup.
Ether (ETH): ETH was trading up 0.9% at about $1,570.
Decentraland (MANA): The native token of the metaverse project has gained about 152% in January. Decentraland’s price uptick has largely followed its announcement of a number of new features mid-month, although the platform’s user figures haven’t increased significantly. MANA’s price was recently trading up 3% to 74 cents Tuesday.
Sudoswap (SUDO): Popular non-fungible token (NFT) marketplace Sudoswap on Monday issued and airdropped its sudo tokens to users based on predetermined criteria. Sudoswap allows users to instantly swap their NFTs for other tokens on the Ethereum blockchain. It locks over $3.7 million worth of token value as of Tuesday, per DeFiLlama.
Crypto Market Analysis: 'Bitcoin, Ether Price Surge a Reversal From Darkest Days of 2022.
By Glenn Williams Jr.
Both of the largest cryptocurrencies by market capitalization are trading much...
https://www.coindesk.com/markets/2023/01/31/crypto-markets-today-fed-preview-bitcoin-holds-steady-at-229k/
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