Fed Watch: Bitcoin Gives Up Weekend Gains, Analysts Say Not To Worry – Crypto News – Crypto News
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Fed Watch: Bitcoin Gives Up Weekend Gains, Analysts Say Not To Worry Fed Watch: Bitcoin Gives Up Weekend Gains, Analysts Say Not To Worry

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Fed Watch: Bitcoin Gives Up Weekend Gains, Analysts Say Not To Worry – Crypto News

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Major crypto tokens retreated Monday and erased their weekend gains as traders gear up for a potentially volatile week ahead of the Federal Reserve’s interest rate decision.

Bitcoin was trading about 2.5% lower Monday afternoon in New York, hovering around $23,000 after briefly approaching $24,000 on Sunday. ether was similarly down, trading almost 4% lower and remaining around the $1,500 level.

The whipsaw pattern has some traders crying “bull trap,” since both bitcoin and ether were unable to rally past their breakout levels, but analysts say there is likely steam left in the rally after this week’s uncertainty.

“I’d really view this as natural volatility rather than any major market signal,” Darius Tabatabai, CEO of decentralized exchange Vertex Protocol, said. “With the Federal Open Markets Committee meeting this week, I’d expect the market to take a breather and positioning to slow down slightly as traders clean up their books ahead of the meeting.”

Markets are almost certain the Fed will opt for a slower-paced hike this week and decide on a 25 basis point increase, according to date From CME. With cooling inflation, slowing growth and a general sentiment among international central banks that a pause in rate hikes is warranted, some investors are wondering if the Fed’s hawkishness is fading.

“Reaching peak hawkishness is one of our three keys to a bottom, and the most important one, so if the Fed has reached peak hawkishness that’s a powerful positive to consider,” Tom Essaye, founder of Sevens Report Research, wrote in a note Monday. .

Of course, with inflation still running far above the Fed’s 2% target, its work is not yet complete, Essaye added.

Retracement or not, the next few days will be telling in terms of future price action, Marcus Sotiriou, market analyst at GlobalBlock, said in a note, Monday. If crypto tokens can manage to break through these key resistance levels, traders can rest assured the rally will be sustained, he added.

Even amid Monday’s falter, crypto is poised to lock in a strong month. Bitcoin and ether are up about 40% and 32%, respectively, since the start of the year. a historic feat for January, Josh Olszeqicz, head of research at Valkyrie Investments, said. A minor selloff is not yet telling of a lasting trend, he added.

“Low timeframe technical analysis, including a rising wedge or channel with declining momentum on relative strength index, does support a near term pullback in price,” Olszeqicz said. “This combination of technicals is commonly seen when rallies become overextended and can trap entrants who were late to the party.”

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