Bitcoin holds $23,000 as crypto traders brace for Fed decision. What happens afterwards.

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Bitcoin prices have had a stellar January, rallying around 40% since the start of the year. The time of dreams

Bitcoin and other cryptocurrencies were down slightly on Monday, paring gains after rallying over the weekend. Crypto traders are awaiting the Federal Reserve’s interest rate decision due on Wednesday, which will likely be a catalyst for the next big move.

The price of bitcoin is down less than 1% in the past 24 hours to $23,250, after closing in on $24,000 during a spike over the weekend. The biggest digital asset remains at the highest levels since last August after a meteoric rally to start the year, with Bitcoin jumping around 40% in weeks to erase all losses since the bankruptcy of crypto exchange FTX in November which shook the markets.

Bitcoin is gradually approaching its major moving averages. Week 200 is just above $24,700 and week 50 is now at $24,500. A break below these levels would be a strong sell signal. A bounce above them could restore confidence in the crypto market, said Alex Kuptsikevic, an analyst at brokerage FxPro. But be prepared for an extended consolidation or correction before a decisive move higher.

Traders eye Wednesday’s Fed rate decision as the next major catalyst for stocks and digital assets, with Bitcoin likely to take inspiration from the Dow Jones Industrial Average and S&P 500. Cryptos have become correlated with stocks over the past year amid a macro backdrop of rising interest rates, which is dampening demand for both risk-sensitive asset classes.

Beyond Bitcoin, Ether is the second largest cryptoshed by 1% at just under $1,600. Smaller cryptos or altcoins were weaker, with Cardano down 3% and Polygon 4% in the red. Memecoins showed much the same, with Dogecoin and Shiba Inu slipping 3%.

Write to Jack Denton at [email protected]

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