As received from our reports, Crypto prices remain flat as traders are focused on liquidity and the Federal Open Market Committee’s (FOMC) interest rate decision. The USD Index is nearing a five-week low at 103.19. While BTC and ETH are slightly up, trading volume is flat across the market, and In the past 24 hours, Dogecoin has shown a significant 4% increase, making it one of the rapidly changing tokens in the market. Meanwhile, the largest stackers of sats are mini-whales, holding over 10 BTC. Given macroeconomic events, this suggests a new level of conviction creating for crypto. Traders are anticipating the FOMC’s decision, with prediction markets indicating an 85% likelihood of a 25 bps increase. However, according to a CNBC survey, only 52% of traders think that the Fed should increase rates.
It’s been three years since the market experienced an awful week, with 500 S&P losing almost 17% of the whole value and The Jones Industrial Average experiencing its most significant single-day decline in history. COVID cases were skyrocketing worldwide, with New York City closing all bars, restaurants, and schools. In Spain, people were already several days into lockdown. The financial machine sprang into action. The Federal Reserve lowered its benchmark interest rate to nearly zero and vowed to increase its bond purchases by a minimum of $700 billion, stating their determination to do whatever is necessary. This move was effective as the market witnessed an initial setback but eventually rallied despite the sluggish global economy.
The world of finance is complex, and the impact of macroeconomic events is not always apparent. The relationship between Bitcoin and inflation is a case in point. The crypto community argues that Bitcoin is a hedge against inflation, but is it really? Alex Thorn, head of firmwide research at Galaxy, shared his opinion on the subject at Consensus 2023 in his talk titled, “Bitcoin and Inflation: It’s Complicated.”
As the FOMC’s rate decision looms, traders focus on the liquidity question and what the outcome could mean for crypto. The new group of sats stackers with wallets holding greater than 10 BTC suggests a new level of conviction forming for crypto, even with macroeconomic events.