Bitcoin steadies as traders await Fed decision
Bitcoin edged higher on Wednesday, holding firm after recent gains as investors looked ahead to the Federal Reserve’s interest rate decision for guidance on U.S. monetary policy and the economy.
The world’s largest cryptocurrency touched a near one-month high on Tuesday, recovering some of the losses seen in late August. Broader crypto markets also advanced this week, supported by improving risk appetite as traders positioned for a potential U.S. rate cut.
However, momentum in digital assets was tempered by doubts surrounding corporate treasury strategies, which capped stronger upside. By 01:23 ET (05:23 GMT), Bitcoin was up 0.5% at $116,552.
Fed rate cut and Powell’s outlook in focus
The Fed is widely expected to lower interest rates by 25 basis points at the close of Wednesday’s meeting, although some traders are betting on a deeper 50 bps cut.
Expectations for easier policy grew after data showed a cooling U.S. labor market. Still, sticky inflation and higher U.S. tariffs raised uncertainty over the Fed’s long-term outlook. Chair Jerome Powell is expected to provide fresh signals later in the day.
Lower rates generally benefit cryptocurrencies since they unlock liquidity that often flows into speculative markets. Bitcoin’s major bull run in 2021 was largely fueled by ultra-low rates during the post-pandemic recovery.
Bitcoin exchange reserves drop, stablecoins rise
Data from CryptoQuant revealed that Bitcoin reserves on centralized exchanges fell to their lowest levels since January 2023. This suggests more coins are moving into private wallets, reducing potential selling pressure.
At the same time, stablecoin balances on exchanges have been climbing, pointing to increased market liquidity. This “dry powder” could signal that investors are preparing to deploy funds into crypto, potentially boosting prices in the near term.
Crypto price today: altcoins trade mixed
Altcoins moved in a narrow range on Wednesday as traders remained cautious ahead of the Fed outcome. Ethereum (ETH) slipped 0.8% to $4,492.59, while XRP gained 0.4% to $3.0152.
Solana dropped 0.9%, whereas Cardano rose 1.1%. In the meme coin space, Dogecoin dipped 0.8%, while $TRUMP token ticked up 0.2%.
