As the FOMC rate decision approaches, Bitcoin, Ethereum, and XRP have seen slight gains. Traders exhibit a risk-averse sentiment, with falling derivative volumes and liquidations. On-chain data suggests potential for price appreciation. Analysts predict volatility around the FOMC decision, with Trump’s pro-crypto messaging influencing market dynamics. Price forecasts indicate possible recoveries for Bitcoin and Ethereum, while XRP awaits upcoming legal developments.

In anticipation of the U.S. Federal Open Market Committee (FOMC) rate decision at 2 PM ET, Bitcoin (BTC), Ethereum (ETH), and XRP are experiencing modest gains. Unlike earlier bear markets, traders have observed shorter bear cycles followed by rapid price surges, indicating potential opportunities for both buying dips and taking profits amidst a protracted bear market.

Sentiment among traders for Bitcoin, Ethereum, and XRP has shifted to a risk-averse stance as indicated by declining derivative market activity. Specifically, trading volume for Bitcoin and Ethereum fell by 11% and 7%, respectively, while XRP experienced a notable 14% decrease in trading volume within a 24-hour period. Furthermore, nearly $89 million in liquidations within the top three cryptocurrencies has contributed to this cautious trading behavior.

On-chain analysis conducted by Santiment reveals a positive funding rate for Bitcoin on Binance for three consecutive days, suggesting a potential appreciation in price amongst traders, even amidst reduced activity. In contrast, Ethereum’s supply held by large holders has stabilized, while Bitcoin supply controlled by funds has continued to decrease. Moreover, XRP has seen a resurgence in daily active addresses following a temporary decline.

The forthcoming FOMC rate decision is projected to increase market volatility and could present buy opportunities or profit-taking scenarios for cryptocurrency traders. Bitget CEO Gracy Chen expressed that Trump’s favorable stance on cryptocurrency is intriguing traders, particularly with discussions surrounding a strategic Bitcoin reserve and potential legislative advancements regarding stablecoins. Chen foresees the possibility of Bitcoin prices hitting $200,000 within the next couple of years.

Analysts predict that the FOMC meeting may maintain the federal funds rate between 4.25%-4.50%. This could lead to short-term price rallies if the Federal Reserve offers signals of potential rate cuts, thereby boosting risk appetite within the market, although a more hawkish stance might result in downward pressure. The volatility surrounding the announcement may stem from Federal Reserve Chair Jerome Powell’s forthcoming comments and revised rate projections.

Current indicators suggest Bitcoin may recover to the $87,000 level, with prices currently around $83,517. Technical indicators, such as a rising Relative Strength Index (RSI) and positive MACD signals, bolster this bullish trend. Ethereum’s price is also recovering, targeting the critical $2,100 level, following a gain of 2.39% on the day. Two momentum indicators are showing positive signs for Ethereum’s price trajectory.

XRP’s forecast indicates a potential rally of nearly 7% as it approaches resistance at the Fair Value Gap level of $0.2707. Positive momentum illustrated by the upward sloping RSI and MACD adds to the bullish outlook for XRP. Factors such as developments in Ripple’s ongoing legal battles and potential inclusion in a Strategic Reserve could significantly influence XRP’s short-term price actions alongside the FOMC decision.

It is important to note that this article does not serve as investment advice and is intended for educational purposes only.

In summary, cryptocurrency traders are closely monitoring the upcoming FOMC rate decision amidst changing market conditions. Reduced trading activity suggests a cautious approach, while on-chain analyses indicate potential price appreciation for Bitcoin and XRP. Uncertainty surrounds the effects of Trump’s pro-crypto stance and broader economic signals. As such, traders may find both buying and profit-taking opportunities, emphasizing the necessity of navigating these volatile conditions judiciously.

Original Source: crypto.news

Related posts:

Bitcoin Surges to $85,000: Fed Rate Cuts and Trump’s Return Drive Predictions of $420,000 Peak XRP Surges 17%, Outperforming Bitcoin Amid Regulatory Developments and Speculation on Trump Administration Dogecoin Peaks at 3.5-Year High as Bitcoin Dips Below $100K Bitcoin Price May Surge to $100,000 Following Trump’s Crypto Summit