Crypto Markets Analysis: Bitcoin, Ether Trading Activity Lessens as Investors Await FOMC’s Next Interest Rate Hike

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$BTC and $ETH were trading around new areas of support; markets were quiet ahead of a likely 25 basis point interest rate increase by the U.S. Federal Reserve. GWilliamsJr_CMT writes

BTC, the largest cryptocurrency by market capitalization, has risen 6.4% in value over the past seven days, while ETH, the second-largest crypto, has dropped 1.2%. Both cryptos had risen more than 30% earlier in January.The more muted price movement suggests that investors remain cautious about riskier assets amid often conflicting signs about economic growth and inflation, including this week’s unexpectedly small increase in gross domestic product and decline in jobless claims.

Momentum of both digital assets has also declined, according to the 14-day Relative Strength Index . Bitcoin’s RSI remains above 70, implying that it still resides in overbought territory. ETH’s RSI by contrast has fallen to 60., albeit tenuous, near $22,800, while ETH’s support resides near $1,570. The top performers over the last seven days were MATIC and LEO, up 12% and 10.4% respectively. ETC and ETH were the laggards, with ETC up 0.9.%.Bitcoin has maintained a strong correlation to copper futures, with a coefficient of 0.89. Given copper’s role as a measure of economic health, this trend implies that investors and other observers of crypto markets are heavily weighing macroeconomic analysis.

Markets next week will be eyeing the Federal Open Market Committee interest rate decision, largely expected to be a 25 basis point increase BTC’s correlation with the S&P 500 has waned slightly over the last week, declining to 0.69 from 0.89 on Jan 11. Its correlation with the tech-heavy Nasdaq Composite remains elevated at 0.89, underscoring the “bitcoin trades like a high-beta tech stock” narrative.The SSR measures the ratio between the supplies of bitcoin and stablecoins.

 

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