First Mover Americas: Bitcoin Steady at $19K as Traders Wait for Fed's Decision

  • Price Point: Bitcoin was trading flat in line with stocks as investors await the Federal Reserve's interest rate decision on Wednesday.
  • Market Moves: Bitcoin investors will be focused on what Fed officials have to say Wednesday about "core inflation" more than on the interest rate decision itself.
  • Chart of the Day: Ether has broken out of a three-month bullish trendline.

This article originally appeared in First Mover, CoinDesk’s daily newsletter putting the latest moves in crypto markets in context. Subscribe to get it in your inbox every day.

Price Point

Bitcoin (BTC) was holding steady at just above $19,000, as traders awaited an expected interest-rate hike later Wednesday by the Federal Reserve. (Scroll down to Market Moves for Omkar Godbole’s preview of the meeting.)

The largest cryptocurrency appeared to be moving in line with traditional markets, where investors were mostly staying on sidelines ahead of the meeting. The Fed decision is expected at 2 p.m. ET (18:00 UTC), followed by a press conference with Fed Chairman Jerome Powell.

Ether (ETH) was also little changed at just over $1,300 – ostensibly bringing relief to traders still reeling from last week’s 24% plunge, as the Ethereum blockchain successfully underwent its much-hyped Merge to a more energy-efficient system.

CoinDesk’s Shaurya Malwa reported that “funding rates” – which are similar to interest rates but which are what traders pay for leveraged bets on crypto exchanges – reverted to normal levels; which could be a sign that the ether market is turning less bearish

In the news, the stablecoin issuer Tether was ordered by a U.S. judge in New York to produce financial records relating to the backing of USDT. (CoinDesk’s Krisztian Sandor reported Tuesday on a new dollar-pegged stablecoin, CUSD, from the decentralized-finance platform Coin98.)

CoinDesk Market Index

Biggest Gainers

Asset Ticker Returns DACS Sector
Ravencoin RVN +5.19% Currency
Kusama KSM +4.99% Smart Contract Platform
Polymath POLY +4.44% DeFi

Biggest Losers

Asset Ticker Returns DACS Sector
Chiliz CHZ -5.33% Culture & Entertainment
Terra Luna Classic LUNA -4.48% Smart Contract Platform
Rarible RARI -3.96% Culture & Entertainment

Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive and standardized classification system for digital assets. The CoinDesk Market Index (CMI) is a broad-based index designed to measure the market capitalization weighted performance of the digital asset market subject to minimum trading and exchange eligibility requirements.

Market Moves

Fed Preview: Bitcoin Investors to Look Past Jumbo Rate Hike and Focus on Economic Assessment and Borrowing Cost Estimates

By Omkar Godbole

With risky assets, including bitcoin, under pressure ahead of Wednesday's pivotal Federal Reserve (Fed) meeting, pundits think markets have already incorporated a super-sized rate hike.

So the focus will be on what the Fed says concerning the persistent core inflation (core inflation strips out the energy and food components), the labor market and the demand conditions that have remained stronger than policymakers judged in July.

"The theme for tomorrow to me is not about 75 [basis point hike] or 100, even though I am in the 75 camp. The theme for tomorrow is that the Fed thought the economic weakness we saw in Q2 was going to assist them in getting inflation back to target and they no longer have confidence," Jon Turek, author of the Cheap Convexity blog, wrote in a note to subscribers Tuesday.

The Fed saw evidence of a slowing economy at its July meeting, but the data released since then suggests otherwise. Notably, the jobs market has remained firm, keeping wages higher. The August consumer price index (CPI) figure released last week revealed that prices for things like rent and services are preventing inflation from cooling.

Read the full story here.

Chart of The Day

Ether Dives Out of 3-Month Bullish Trendline

By Omkar Godbole

Ether's daily chart shows renewed bearish developments. (Source: TradingView)
  • Ether has breached the trendline, characterizing the corrective rally from lows reached in June.
  • The breakdown comes days after the cryptocurrency fell below a Japanese charting tool called the Ichimoku cloud.
  • "Ether broke below the daily cloud last week, increasing the likelihood that we see a retest of the psychological support of $1,000, aligned with the June low," Katie Stockton, founder of Fairlead Strategies, wrote to clients on Monday.

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