Bitcoin Halts at $41K as Traders Eye Fed Rate Decision; AVAX Flips Dogecoin as Altcoins Jump

Investors will monitor Fed Chair Jerome Powell's press conference Wednesday for signs of potential rate cuts next year.

AccessTimeIconDec 12, 2023 at 9:43 p.m. UTC
Updated Mar 8, 2024 at 6:35 p.m. UTC
  • Bitcoin remained steady around $41,000 after Monday's dramatic flush.
  • Halt in BTC's momentum saw many altcoins jump, with DOT, ATOM, INJ, TIA among the biggest gainers.
  • Market observers widely anticipate the Fed will pause rate hikes on Wednesday's FOMC meeting.

Bitcoin's (BTC) price stabilized around $41,000 Tuesday ahead of this year's last U.S. interest rate decision due Wednesday as crypto traders digested yesterday's major leverage flush and largest daily drawdown since mid-August.

The largest crypto asset recovered to $42,000 earlier in the day from yesterday's low of $40,200 before dipping to $40,600 in the U.S. afternoon hours. After paring some losses, BTC was changing hands at $41,300, slightly up 0.3% over the past 24 hours.

Ether (ETH), the second largest cryptocurrency, declined 1% during the same period, below $2,200.

While the momentum of the two leading cryptocurrencies slowed, many altcoins jumped through the day.

Native tokens of Polkadot (DOT), Cosmos (ATOM) and Injective (INJ) were among the best-performing crypto majors, gaining 10%-20% over the past 24 hours.

Avalanche (AVAX) overtook the popular dog-themed meme token dogecoin's (DOGE) market capitalization, gaining nearly 5% on the day and more than doubling its price in a month.

Recently launched blockchain data solution Celestia (TIA) surged 20% to a new all-time high as it announced that it will become an option for blockchain builders using Polygon's software tools to spin up new layer-2 networks atop Ethereum.

Venture capital-backed blockchain Aptos' token (APT) also rallied 16%, defying the release of over $200 million worth of previously locked-up tokens to its outstanding supply earlier today, according to Token.Unlocks.

The CoinDesk Market Index (CMI), which tracks a weighted basket of almost 200 digital assets, was up 1.2% over the past 24 hours.

The Federal Reserve, the central bank of the U.S., is widely expected to hold Fed fund rates steady at 5.25%-5.5%, concluding the Federal Open Market Committee (FOMC) meeting Wednesday as Consumer Price Index (CPI) inflation continued to edge lower in November.

"Disinflation is in full force and the latest round of CPI data for November 2023 is further proof that the trend is intact," Caleb Franzen, founder of Cubic Analytics posted on X.

Slowing inflation nudges the Fed to pause rate hikes Wednesday for the third consecutive occasion. At the same time, investors will monitor Fed Chair Jerome Powell's press conference for signs of potential rate cuts next year.

"It is commonly expected that a pause in rate hikes could be interpreted as a bullish signal for the market," Bitfinex analysts said in an emailed note. "Cryptocurrencies have previously experienced positive market movements following decisions by the Fed to keep interest rates steady."

Edited by Aoyon Ashraf.


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Krisztian  Sandor

Krisztian Sandor is a reporter on the U.S. markets team focusing on stablecoins and institutional investment. He holds BTC and ETH.