Bitcoin, Ethereum, Dogecoin Dip Ahead Of FOMC Meet: Analyst Says King Crypto Undergoing Correction, Suspects A 'Bounce' Within 24 Hours

The cryptocurrency market experienced a decline on Tuesday evening, just before the U.S. interest rate decision that is expected to take place on Wednesday.

What Happened: The Federal Reserve is widely anticipated to maintain the current range for Fed fund rates at 5.25%-5.5% following the conclusion of the Federal Open Market Committee (FOMC) meeting on Wednesday. This decision could come as the Consumer Price Index (CPI) inflation has shown a gradual decline in November.

According to data from Coinglass, within the last 24 hours, over 70,162 traders were liquidated. The total amount of liquidations reached a substantial $156.71 million. It is worth mentioning that the largest single liquidation order occurred on OKX, specifically on the ETH-USD-SWAP, with a value of $2.11 million.

Top Gainer (24 Hour)

The global crypto market cap has reached $1.5 trillion, marking a 0.59% decrease in the last 24 hours.

The stock market experienced its fourth consecutive day of gains on Tuesday, as investors on Wall Street carefully analyzed the latest inflation data in hopes of gaining insights into the Federal Reserve’s future monetary policy decisions.Closing at 4,643.70, the S&P 500 saw a 0.46% increase, while the Nasdaq Composite climbed 0.70% to 14,533.40.

Traders will now shift their focus to the upcoming policy announcement by the Federal Reserve, which is scheduled for Wednesday at 2 p.m. Traders will meticulously analyze Chair Jerome Powell’s remarks for any indication of potential rate cuts in the near future.

See More: Best Cryptocurrency Scanners

Analyst Notes: According to cryptocurrency analyst Michael Van de Poppe, Bitcoin is currently undergoing a correction, and this correction is also affecting other altcoins in the market.  "It’s a standard pattern prior to the FOMC, I suspect we’ll see the bounce happening in the coming 24 hours and continue from there. Most eyes are going to be focused on Ethereum network as a rotation, though."

According to pseudonymous analyst Altcoin Sherpa, there is a possibility that Bitcoin may experience further downward movement after its sudden retracement. While Altcoin Sherpa believes that the pullback is not yet complete, he asserts that Bitcoin still appears bullish when examined on a higher time frame.

"This could be the ‘test dump' and price could certainly make another leg down. Best to have some bids lower than you think. The market is still very bullish, not expecting a breakdown (yet)… 

In terms of the short-term outlook, the analyst predicts that the price will likely gradually decline on low time frames, with more information to come soon. However, Altcoin Sherpa emphasizes that this minor setback should be viewed in the context of the overall movement of Bitcoin, which is relatively insignificant.

"If that happens, then we're still not dead, but we just cool for one month or so. Kind of expected something like this. Usually, it goes strong move –> one-ish month of cooling –> next leg up. If we dump, then we consolidate, then pump in January in my opinion. Stay safe."

According to Santiment, a crypto analytics firm the current market conditions have been characterized by heightened volatility. An interesting trend has emerged where Bitcoin is experiencing a slight increase in movement back to exchanges, indicating a state of uncertainty among traders. On the other hand, the presence of Tether, a stablecoin, on exchanges has shown a positive development for bullish traders. Notably, there has been a 6.9% increase in the amount of USDT (USD-pegged cryptocurrency) on exchanges compared to the previous six months.

Photo by Fernando Cortes on Shutterstock

Read Next: Jim Cramer Advises Against Using Binance, Provokes Strong Reactions From Twitter Users