The largest cryptocurrency bitcoin is in a super rally on Wednesday, touching its highest level in a month on the back of a significant cooling in US inflation data. Broadly speaking, the crypto markets are moving bullish and the focus is now shifting towards the FOMC policy meeting. Bitcoin, which dominates the crypto market, further improved its weekly performance to move closer to the $18,000 mark. Furthermore, with a rosier than expected inflationary print, bitcoin broke its seven-day losing streak. Other counterparts such as Ether, Binance, XRP, and Dogecoin have also seen gains in the past 24 hours.
At the time of writing, the crypto market cap was up by 2.58% over the previous day to around $870.29 billion, according to data from CoinMarketCap. Furthermore, the market volume increased by 56.82% to $52.72 billion in the last 24-hours.
Bitcoin Which has a market dominance of around 39.27%, was trading at over $17,780, up 3.5% in the last 24-hours. The market cap of crypto is around $341.5 billion. Its weekly performance has improved with a gain of over 4%. Binance is the top trending cryptocurrency on Wednesday. The intraday high for bitcoin is currently at $17,930.09.
“Bitcoin has touched its highest point in a month ahead of the crucial Fed meeting,” said Shivam Thakral, CEO of BuyUcoin, India’s second longest running crypto exchange. Banks will release their inflation numbers. Which will have a significant impact on the price movement of digital assets in the medium to short term. Bitcoin dominance has crossed the 41% mark indicating de-risking by a large number of investors.
Other counterparts such as Ethereum are up by around 4% over the past 24 hours, while BNB and XRP are up by over 2% each, and Dogecoin is up by 1.75%.
on Tuesday, US inflation It fell to its lowest level of 7.1% in November, better than the forecast of 7.3%. This month’s inflation rate is the lowest since December last year. Also, this will be the fifth consecutive monthly slowdown in inflation.
According to an Arcane Research report, a lower-than-expected CPI release on Tuesday sent BTC towards $18,000 after seven days of volatility. Apart from the CPI, the markets have been relatively calm. Institutional activity has subsided after a brief surge, and structurally, volumes and flows have remained stable.
Expectations are now of a dovish stance from the US Federal Reserve in December policy. The majority expected a 50 bps rate hike instead of the fourth 75 bps hike in the key funds rate. To combat multi-decade high inflation, the FOMC is tightening monetary policy by raising key rates by 75 bps for three consecutive policies.
In their market research report dated December 13, Bendik Ski, Head of Research and Vetel Lunde Senior Analyst at Arcane Research, said, “While bitcoin has stabilized around $17k over the past few weeks without any physical action, this week Can be volatile due to many important economic events.”
The market is likely to react sharply to the FOMC, and market participants are currently giving an 80% chance for a 50 bps hike versus a 20% chance for a 75 bps hike, said the note from experts at Arcane. In addition to the impending hike, clues provided by Jerome Powell regarding the predicted hiking schedule for 2023 will likely contribute to creating an unstable environment. Furthermore, the BoE and ECB will increase interest rates this week, which could have an impact on bitcoin as it can directly affect the strength of the dollar.
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