Bitcoin and other cryptocurrencies have experienced a slip in value on Thursday amidst a weakening of risk-sensitive assets, following the Federal Reserve’s recent monetary policy decision. This drop in value suggests that the crypto market is returning to its range-bound trading pattern, which has been prevalent in recent months.
Over the past 24 hours, the price of Bitcoin has seen a 1% retreat, stabilizing around $26,850. This decline follows a peak near $27,300 on Wednesday when the Fed announced its decision to keep interest rates unchanged but indicated that borrowing costs may increase in the future. As a result, the largest digital asset finds itself back in the familiar zone around $26,000, which has characterized a period of stagnant activity exceeding one month. The combination of historically low volatility and trading volumes has contributed to this lull in the crypto market.
Markus Levin, the co-founder of the renowned blockchain network XYO, anticipates further sideways movement for Bitcoin and the overall market. He explains, “We can expect a gradual accumulation of assets, with dips being quickly bought up and rallies being short-lived.”
This market analysis suggests that despite the recent slip in value, the cryptocurrency market remains resilient and poised for potential growth in the near future.
The Fed’s Pause on Rate Hikes Leaves Cryptos in a Holding Pattern
Cryptocurrencies, much like the Dow Jones Industrial Average and S&P 500 in the stock market, were impacted by the recent decision of the Federal Reserve. However, the reaction in the crypto market was relatively subdued, as the pause on rate hikes was widely anticipated. While Bitcoin’s future remains tied to interest rates—higher returns on safer assets like cash or Treasury bonds create less incentive for investors to take risks with cryptocurrencies—the next monetary policy announcement from the Fed is not expected until November.
In the meantime, investors should prepare for more of the same lackluster Bitcoin activity that has characterized the market since early summer.
According to Levin, a notable crypto expert, there is unlikely to be any significant upward movement in the broader digital asset market until a compelling catalyst emerges. This catalyst could come in the form of approval for one or more proposed spot Bitcoin exchange-traded funds (ETFs), currently under consideration by the Securities and Exchange Commission. Alternatively, it could be generated by next year’s Bitcoin halving—a reduction in the pace of Bitcoin issuance—which will impact supply and demand dynamics.
In conclusion, while the crypto market awaits a significant boost, investors are advised to remain patient as they anticipate potential transformative events that could bring about a new phase of growth.
Alternative Cryptocurrencies Experience Minor Losses
Introduction
In addition to Bitcoin, Ether, the second-largest cryptocurrency, has experienced a slight decline of 1.5% to $1,610. Alongside, smaller tokens or altcoins such as Cardano and Polygon have also witnessed a weakening trend, with a decrease of 2%. Memecoins like Dogecoin and Shiba Inu have also encountered similar reductions, with a drop of 1% each.
