Crypto Market Hasn't Reacted Ahead Of Fed's Decision

The Fed chairman, Jerome Powell. (Photo; Doc. Bitcoin ExchangeGuide)

JAKARTA - The crypto market shows a variety of movements ahead of the Fed meeting which has the potential to affect the direction of digital asset prices. On January 30, the crypto market moved variedly amid high volatility.

Bitcoin, the largest and oldest cryptocurrency, rose slightly 0.3% to US$43,500 (Rp 688.6 million) at 21.00 WIB, according to CoinDesk data. Bitcoin fell below US$40,000 (Rp 632.1 million) at the end of last week, before rebounding on Monday 29 January 2024.

Then, Ethereum (ETH), the second largest cryptocurrency, slumped 0.4% to $3,050, after climbing nearly 10% on Monday. Even so, Ether has still been in a positive trend since the beginning of the year, driven by the growth of the decentralized financial sector (DeFi) and non-fungible tokens (NFT), most of which use the Ethereum network.

Crypto analysts think the crypto market is still looking forward to a positive push from fundamental and technical factors to boost the price of Bitcoin cs higher. Some of the factors that are expected to provide fresh air include crypto adoption by companies and institutions, the development of supporting regulations, and increasing interest from retail investors.

"Will bitcoin hit a low of 20,000 US dollars (IDR 316.1 million) this year, as predicted by some of Deutsche Bank's latest analysts and surveys? I would say it's impossible," Lucas Kiely, chief investment officer of digital wealth platform Yield App, as quoted by Reuters. "This year's big story is about crypto developing into a stable market that combines DeFi's benefits with the best practices of traditional finance."

Influence Stock Market

Meanwhile, the US stock market had risen on Monday, January 29, 2024, thanks in part to the announcement of a quarterly loan by the US Treasury Department which was lower than previously expected. This lowers pressure on the bond market and yields.

"We know that it is a key positive catalyst as stocks accelerate rally over the past hour and sectors that benefit most from lower yields (small shares and technology) are the best," said Tom Essaye, founder of Seven's Report Research.

However, stock market rallies are likely to be limited ahead of the Fed's announcement of a decision not to change the benchmark interest rate but to signal about plans to reduce stimulus and raise interest rates in the future.

"There is no zero chance of cutting interest rates at tomorrow's meeting," Essaye said. "What will make this meeting even more hawkish or dovish (pushing stocks down or extending rallies) is whether the Fed will immediately provide clues about the upcoming cut in interest rates."