Bitcoin Rises Ahead of Fed, Altcoins Remain on Standby.

Strong Rise in Bitcoin Before the Fed

Bitcoin has shown significant recovery ahead of the final interest rate decision of the year, reaching its highest level in the last three weeks. According to data from blockchain analysis company Santiment, a renewed sense of FOMO (fear of missing out) appears to be dominating among investors. According to CoinMarketCap data, Bitcoin surpassed the $94,000 level last night, reaching its highest value since November 25. However, after this rapid rise, Bitcoin fell back to around $92,500 at 10:30 AM UTC.

Increasing Demand for Bitcoin and Ethereum

Yesterday's price movements indicate that investors are gravitating toward major crypto assets. Both Bitcoin and Ethereum hold quite high market dominances. According to TradingView, Bitcoin's market dominance is at 59%, while Ethereum stands at 12.82%. According to Wintermute's latest market update, it has been observed that both individual and institutional investors are simultaneously investing in Bitcoin and Ethereum.

Central Banks' Decisions Awaited

Attention is currently focused on the decisions of central banks. With today's Fed interest rate decision, the upcoming meeting of the Bank of Japan next week is expected to create volatility in the market until the end of the year. Wintermute notes that this period indicates a divided market amidst high implied volatility. Investors expect Bitcoin to reach targets of $85,000 or $100,000 by the end of December. However, unless a decisive macro surprise occurs, it is likely that crypto assets will remain within a narrow range.

Expectation of Fluctuations Before the Fed

The Fed's expectations create an uncertain situation. The US central bank will announce its final interest rate decision of the year this evening. The CME FedWatch tool shows that the markets have priced in an 88% probability of a 0.25% rate cut. Following the rate cut in September, Bitcoin and Ethereum briefly surged, but the decline in October limited this effect. A possible rate cut is expected to lead to increased liquidity and hence encourage investments in such assets.

In Conclusion

Many analysts warn that the markets may struggle to maintain the recent rise after the Fed's decision. Jeff Mei, the operations manager at BTSE, emphasizes that if the Fed hesitates to cut rates due to inflationary pressures, the crypto markets could be negatively affected.