Bitcoin trades sideways ahead of Fed move

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Bitcoin is trading sideways as investors await the outcome of a crucial Federal Reserve meeting on Wednesday afternoon.

The central bank, which will issue a policy statement at 2:00 p.m. Eastern time followed by President Jerome Powell’s press conference at 2:30 p.m., is expected to announce a faster cut to its bond buying program. That, in turn, could pave the way for interest rate hikes as early as the second quarter of next year.

Read: It’s Fed Day. Here are two big questions for a trading veteran’s markets.

Bitcoin BTCUSD, -2.88% was recently trading at around $ 46,970, down 0.02% in the past 24 hours. Ether ETHUSD, -4.18% has fallen 2.55% in the past 24 hours, recently trading at around $ 3,688.

Amid macroeconomic uncertainties, bitcoin has fallen more than 30% from its all-time high of $ 68,991 in November. Ether is down more than 20% from its all-time high of $ 4,865.6.

“As the bitcoin and crypto market continues to mature and institutionalize, Fed regimes and macro events may have a greater impact on near-term price discovery,” said Louis LaValle, Managing Director of Crypto Fund Manager 3iQ Digital Assets at MarketWatch via email.

See: 5 things to watch out for when the Federal Reserve announces its policy decision on Wednesday

If the Fed becomes less hawkish than the market expected, major cryptocurrencies could recover, according to LaValle. “We have been in a risky environment in the bitcoin and crypto asset for the past month, so if the Federal Open Market Committee (FOMC) meeting doesn’t grab the headlines, this could be a buying opportunity. for those on the fringes.

Also Read: Uncomfortable Looming Question For The Fed: How Much Additional Unemployment Will It Take To Calm Inflation?

“The Fed is also aware of its influence in the markets,” LaValle wrote. “Previous attempts to reduce the balance sheet have not ended so well – remember they threw in the towel with the rate hikes in 2019.”

Read more: Crypto market worried about Fed meeting and high inflation. here’s why

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