In the lead-up to the Federal Reserve's decision on interest rates, Bitcoin experienced a slight increase on Wednesday. The leading digital currency recorded a marginal growth of less than 1% in the past 24 hours, pushing its value over $27,150 and nearing its highest recorded value for the month. This comes as traders have increasingly placed optimistic bets, bracing for possible market fluctuations around the time of the Fed's decision.
Over the past month, Bitcoin has consistently traded above the $26,000 mark, demonstrating notably low volatility and trading volumes. The upcoming decision by the Federal Open Market Committee is being closely watched across all sectors of the market. Cryptocurrencies, similar to traditional stock market indices such as the Dow Jones Industrial Average and S&P 500, are expected to react to the Federal Reserve's rate decision due at 14:00 ET (18:00 GMT).
Market attention has now shifted towards November's decision. There is speculation about whether there will be another rate increase or if financial conditions are sufficiently stringent to curb inflation. Bitcoin's performance continues to be influenced by these rate conditions, having faced significant pressure since the initiation of the Fed's tightening cycle last year.
In anticipation of this event, bullish bets on Bitcoin in the perpetual futures market could potentially trigger a surge in volatility. Binance, which operates the world's largest crypto futures market, has seen Bitcoin open interest rise for three consecutive days to $3.3 billion. These positions overwhelmingly favor a price increase.
However, a hawkish stance from the Fed could unsettle traders and trigger a sell-off. This could result in a sharp drop in Bitcoin prices as leveraged positions are liquidated.
In other cryptocurrency news, Ether saw a slight decrease of less than 1% in its value, trading at $1,640. Meanwhile, smaller cryptocurrencies showed mixed performance. Cardano's value dipped by less than 1%, while Polygon experienced a 1% increase. Memecoins such as Dogecoin remained stable, with Shiba Inu recording a marginal increase of less than 1%.
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