Cryptos Muted As Fed Meet Looms
Cryptocurrencies traded close to the flatline early on Wednesday amidst lingering anxiety ahead of the Fed’s policy decision. Amidst the easing in inflation, the Fed is widely believed to skip a rate hike in the current review. Focus has shifted to the likely forward guidance from the Fed.
The CME FedWatch tool currently shows only a 6.9 percent probability for a 25-basis points rate hike versus 27.5 percent a week earlier. Data released on Tuesday had shown annual consumer price inflation falling to 4 percent in the month of May, versus 4.9 percent in the previous month and expectations of 4.1 percent, deepening expectations of a pause by the Fed. Core inflation that excludes the volatile food and fuel components too dropped as expected to 5.3 percent from 5.5 percent earlier. Month-on-month inflation, which was seen dropping from 0.4 percent to 0.2 percent, cooled to 0.1 percent.
The Dollar Index, a measure of the Dollar’s relative strength has dropped to 102.95, a decline of 0.37 percent from the previous close of 103.34.
Crypto market continues to reflect the brunt of recent regulatory action against crypto giants Binance and Coinbase. Despite the overwhelming expectations of a pause by the Fed, overall crypto market capitalization has fallen to $1.06 trillion, versus $1.12 trillion a week earlier.
Among the top 100 cryptocurrencies, only 3 are trading with weekly gains of more than 1 percent and only 5 are trading with similar gains over a 30-day horizon.
Bitcoin dominates 47.6 percent of the overall crypto market followed by Ethereum which accounts for 19.8 percent. Stablecoins make up 12.1 percent of the market leaving a 20.5 percent market share for the residual altcoins.
Bitcoin touched a 24-hour low of $25,728.37. This contrasts with the top cryptocurrency’s 7-day low of $25,501.84, 30-day low of $25,434.87, 90-day low of $24,955.17, and 52-week low of $15,599.05. It is currently trading at $25,964.73, having shed 0.6 percent overnight and 3.2 percent over the past week.
Ethereum lost 0.2 percent overnight and 6.6 percent over the past 7 days. Ether’s 24-hour low was $1,727.75. The leading alternate currency had touched a 7-day low of $1,721.44, 30-day low of $1,721.44, 90-day low of $1,667.13, and 52-week low of $896.11.
4th ranked BNB (BNB) gained close to 2 percent overnight amidst Binance CEO Changpeng Zhao denying allegations that his crypto exchange has been dumping its holdings of Bitcoin (BTC) and Binance Coin (BNB). BNB has however shed 8.7 percent over the past week.
6th ranked XRP (XRP) dropped 5.2 percent amidst the revelations contained in the much-awaited Hinman documents. Opinion is however divided as to whether the documents, which contain the SEC’s internal email exchanges dating back to 2018 debating the classification of Bitcoin and Ethereum as securities would help Ripple Labs in its legal dispute with the SEC in the matter of classification of XRP as a security.
7th ranked Cardano (ADA) has erased 1.7 percent overnight and 18 percent over the past week amidst the SEC classifying the cryptocurrency as a security in its lawsuit against Coinbase.
8th ranked Dogecoin (DOGE) traded close to the flatline on an overnight basis but has lost more than 9 percent in the past week.
9th ranked TRON (TRX) added 1 percent overnight but is yet to recover weekly losses of 6.7 percent.
10th ranked Polygon (MATIC) shed half a percent in the past 24 hours and 18 percent in the past week amidst the SEC’s classification as a security.
Meanwhile the SEC has in a filing with the U.S. Court of Appeals for the Third Circuit claimed that there was no merit to Coinbase’s extraordinary request for a writ of mandamus to compel the Commission to act on Coinbase’s wide-ranging rulemaking petition. The Commission also submitted that it has not decided what action it should take on the petition in whole or part which it claimed was entirely reasonable given the breadth of the rule-making petition and the fact that it was filed just months ago and supplemented more recently.
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