Cryptocurrencies, stocks slide ahead of Fed rate decision  – Crypto News – Crypto News
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Cryptocurrencies, stocks slide ahead of Fed rate decision  Cryptocurrencies, stocks slide ahead of Fed rate decision 

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Cryptocurrencies, stocks slide ahead of Fed rate decision  – Crypto News

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Cryptocurrencies and US equities dipped Tuesday as latest wage data confirmed that inflation is persisting ahead of the Federal Reserve’s interest rate decision. 

Bitcoin (BTC) and ether (ETH) lost around 3% and 5% over 24-hours, respectively, erasing Monday’s gains. Analysts attribute the dip to the lower-than-expected trading volumes for spot bitcoin and ether exchange-traded products in Hong Kong, which debuted this week. 

“Disappointing ETF volumes out of Hong Kong, however, led to a dramatic selloff, with [bitcoin and ether] dropping ~3.5% to open the day,” Mike Tauckus, head of trading and structuring at BitOoda, said. “Initial indications showed expected inflows to total close to $300 million, while real combined volumes amounted to little more than $11 million.” 

Read more: Successful Hong Kong crypto ETF flows would pale in comparison to US funds

Spot bitcoin ETFs, which hit the market in the US earlier this year, saw more than $4.5 billion in day-one trading volumes, by comparison. 

Stocks were also in the red Tuesday. The S&P 500 and Nasdaq Composite indexes were down 0.7% and 0.4%, respectively, midway through the session. The dip comes as wage data from the US Bureau of Labor Statistics showed a 4.4% year-over-year increase in wages and salaries last month. The rise is doing little to calm traders that heightened inflation is a problem of the past. 

The Fed’s Open Market Committee meeting kicked off today and central bankers will reveal their interest rate decision Wednesday afternoon. Fed fund futures show a 0.5% chance of a rate cut this cycle, according to data from CME Group. 

Markets are starting to get spooked that a rate cut may not come at all in 2024, a possibility that is further fueled by data that shows the economy is relatively strong. 

“The best-case scenario would be for [Fed Chairman Jerome] Powell to come out and admit that he got the December pivot promise wrong, and that the Fed would continue to monitor the data for signs and cut rates as soon as they are confident that inflation’s downward path has resumed and is sustainable,” Noelle Acheson, author of the Crypto is Macro Now newsletter, said. “This has the benefit of sounding reasonable while leaving cuts on the table.”

As for bitcoin, Tauckus says the crypto is in the clear, for now, but should it dip below $60,000, a more sustained selloff is on the table. 

“We view $59,200 as a significant support level for BTC, and should this level get breached with momentum, a pullback to $53,000 is possible,” Tauckus said.

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