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Fed's Influence: Bitcoin Pauses at $41K, AVAX Surpasses Dogecoin in Altcoin Surge

Fed's Influence: Bitcoin Pauses at $41K, AVAX Surpasses Dogecoin in Altcoin Surge

Bitcoin

HANZO

Dec 14, 2023 at 11:58 am

Investors are closely monitoring the press conference scheduled for Wednesday, where Federal Reserve Chair Jerome Powell is expected to provide insights into potential interest rate cuts in the upcoming year. Bitcoin maintained its position at $41,000 following a substantial decline on Monday.

The stabilization of Bitcoin resulted in a surge of alternative cryptocurrencies, witnessing notable increases in assets such as Polkadot (DOT), Cosmos (ATOM), Injective (INJ), and Celestia TIA. Meanwhile, Avalanche (AVAX) outperformed Dogecoin (DOGE) in market capitalization, achieving a 5% gain within a day and doubling its value within a month.

While Bitcoin found stability, Ethereum (ETH) encountered a slight 1% decrease, settling below $2,200. Conversely, alternative cryptocurrencies demonstrated positive momentum throughout the day.

Celestia TIA, a recently introduced blockchain data solution, experienced a remarkable 20% surge, reaching an all-time high. This surge was attributed to the announcement that Celestia TIA would serve as an option for blockchain developers using Polygon's software tools to establish new layer-2 networks on the Ethereum platform.

Despite releasing over $200 million worth of previously locked-up tokens, Aptos' token (APT) witnessed a notable 16% rally, according to Token.Unlocks.

As the Federal Reserve is anticipated to maintain the Fed fund rates within the range of 5.25%-5.5%, the significance of the Wednesday FOMC meeting grows. The Consumer Price Index (CPI) data for November indicates a gradual decrease in inflation, fueling expectations for a third consecutive pause in rate hikes. Investors are keenly awaiting Jerome Powell's press conference for potential indications of future rate cuts.

Caleb Franzen, the founder of Cubic Analytics, highlighted the trend of disinflation, citing the recent CPI data for November 2023 as supporting evidence. There is a prevailing consensus that a pause in rate hikes would be interpreted as a positive signal for the market. Historical data suggests favorable movements in cryptocurrencies following decisions by the Fed to maintain steady interest rates, as noted by analysts from Bitfinex. They anticipate potentially advantageous market trends after the Federal Reserve's decision.

Disinflation is in full force and the latest round of CPI data for November 2023 is further proof that the trend is intact.

Here are the top charts that I'm focused on:
— Caleb Franzen (@CalebFranzen) December 12, 2023