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Cryptocurrencies were mixed on Wednesday as traders waited for the upcoming FOMC, ECB, BoE, and Swiss National Bank (SNB) decisions. Bitcoin stalled at $41,000 while the total market cap of all cryptocurrencies held steady at $1.64 trillion.
There were some bright spots though. Internet Computer’s (ICP) token continued its bull run and reached a high of $6.14, the highest point since May this year. Internet Computer is one of the most comprehensive platforms in the blockchain industry. It has all features, including smart contracts, that enable people to build decentralised applications (dApps).
Fetch AI (FET) also had a good day as it surged to $0.65, its highest point since December 2021. It has risen in the past three straight months and jumped by more than 610% from the lowest point this year. The token has risen because of the strong demand for artificial intelligence solutions.
Other tokens that rose sharply on Wednesday were IOTA (MIOTA), Beam, and Hedera Hashgraph (HBAR). HBAR has jumped because of the strong performance of SaucerSwap, whose DeFi TVL has jumped to more than $43 million. Stader and Pangolin are also gaining market share.
The key catalyst for these cryptocurrencies will be the upcoming Federal Reserve decision, which will come a day after the BLS published strong inflation numbers. The headline CPI dropped to 3.1% while the core CPI remained unchanged at 4.0%, double the Fed’s target of 2.0%.
Therefore, the Fed will likely leave interest rates unchanged between 5.25% and 5.50% and point to more hikes in 2024. It will push back against the possibility of rate cuts in the first half of the year as analysts were expecting.
The Fed is the biggest game in town this week. But other central banks like the European Central Bank (ECB), Bank of England, and SNB will deliver their statements. Historically, however, these don’t move the crypto market.
A highly hawkish Fed will likely be bearish for Bitcoin and other altcoins. Besides, the likelihood of rate cuts as soon as in March was one of the top reasons why Bitcoin and altcoins jumped.
However, there is also a possibility that they will bounce back since the hawkish tone has already been priced in by investors.
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