Bitcoin Rises Ahead of the Fed, Altcoins on Standby

Strong Rise in Bitcoin Before the Fed

Bitcoin has shown significant recovery ahead of the year's final interest rate decision, managing to reach 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) among investors is evident. CoinMarketCap data shows that Bitcoin surpassed the $94,000 level last night, reaching its highest value since November 25th. However, following this rapid rise, Bitcoin dropped to around $92,500 at 10:30 AM TRT.

Increased Demand for Bitcoin and Ethereum

The price movements observed yesterday indicate that investors are turning towards major crypto assets. Both Bitcoin and Ethereum are maintaining relatively high market dominance levels. According to TradingView, Bitcoin's market dominance is at 59%, while Ethereum's is at 12.82%. According to Wintermute's latest market update, it has been noted that investors are investing simultaneously in both Bitcoin and Ethereum, both individually and institutionally.

Central Banks' Decisions Awaited

Currently, attention is focused on the decisions to be made by central banks. With today's Fed interest rate decision and next week's Bank of Japan meeting, it is expected that volatility will be created in the market until the end of the year. Wintermute points out that this period indicates a divided market amidst high implied volatility. Investors foresee Bitcoin reaching targets of $85,000 or $100,000 by the end of December. However, without a significant macro surprise, it is likely that crypto assets will remain within narrow ranges.

Fluctuation Expectations Before the Fed

The expectations regarding the Fed create an uncertain situation. The US central bank will announce the year's final interest rate decision this evening. CME's FedWatch tool indicates that the markets have priced in an 88% probability of a 0.25% rate cut. Following the rate cut in September, Bitcoin and Ethereum showed a short-term rise, while the drop in October limited this effect. A potential rate cut is expected to lead to an increase in liquidity and thus encourage investment in such assets.

In Conclusion

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