Bitcoin Holds $23,000 as Crypto Traders Brace for Fed Decision. What Comes Next.

Text size

Bitcoin
and other cryptocurrencies were slightly lower Monday, paring gains after a rally over the weekend. Crypto traders are awaiting the Federal Reserve decision on interest rates due Wednesday, which is likely to be a catalyst for the next big move.

The price of Bitcoin has declined less than 1% over the past 24 hours to $23,250, having come within striking distance of $24,000 in a spike over the weekend. The largest digital asset remains at the highest levels since last August after a roaring rally to start the year, with Bitcoin jumping some 40% in a matter of weeks to erase all losses since crypto exchange FTX’s bankruptcy in November rocked markets.

“Bitcoin is gradually approaching its key moving averages. The 200-week is just above $24,700, and the 50-week is now at $24,500. A break below these levels would be a strong sell signal. A rebound above them could restore confidence in the crypto market,” said Alex Kuptsikevic, an analyst at broker FxPro. “But be prepared for a prolonged consolidation or correction before a decisive move higher.”

Traders are eyeing Wednesday’s rate decision from the Fed as the next major catalyst for stocks and digital assets alike, with Bitcoin likely to take its cues from the

Dow Jones Industrial Average
and

S&P 500.
Cryptos have become correlated with equities over the past year amid a macro backdrop of rising interest rates, which dampen demand for both classes of risk-sensitive assets.

Beyond Bitcoin,

Ether
—the second-largest crypto—shed 1% to just short of $1,600. Smaller cryptos or altcoins were weaker, with

Cardano
down 3% and

Polygon
4% in the red. Memecoins exhibited much of the same, with both

Dogecoin
and

Shiba Inu
slipping 3%.

Write to Jack Denton at jack.denton@barrons.com