What You Need to Know:
- Global markets are unstable as cryptocurrencies trade sideways ahead of the upcoming U.S. Federal Reserve meeting.
- Bitcoin ETFs enjoyed $1.4 billion in net inflows, demonstrating their stabilizing effect on prices.
- Following a surprising evacuation order from U.S. President Donald Trump regarding Tehran, gold and oil prices surged.
A persistent uncertainty clouds global markets as cryptocurrencies have been trading sideways leading up to this week’s U.S. Federal Reserve meeting. While equities saw a minor recovery on Monday, crypto markets remained defensive due to the previous Friday’s significant $1.2 billion futures liquidation that liquidated overleveraged traders, causing altcoins to drop sharply throughout the weekend.
Currently, XRP XRP price leads the major cryptocurrencies. Bitcoin BTC price, after reaching over $108,000 during the U.S. morning session on Monday, subsequently dropped to around $106,500 due to profit-taking, before rebounding to above $107,000 during the Asian morning hours on Tuesday.
Bitcoin ETFs also saw $1.4 billion in net inflows over the week, reaffirming their role as stabilizers even amidst broader market pullbacks.
In contrast, Ethereum ETH price climbed 1.5% to $2,609 within a 24-hour period but is still trailing behind the Bitcoin-driven gains. Other cryptocurrencies, like Solana’s SOL price and Tron’s TRX price, showed resilience with increases of 1.5% and 2.1%, respectively, although caution prevails among traders.
The geopolitical turmoil prompted an uptick in gold and oil prices as investors sought refuge in traditional safe-haven assets during this uncertain time. This substantial movement in the commodities market stood in contrast to Bitcoin’s performance, which, according to analysts, traditionally reacts slower to macroeconomic events.
“Bitcoin often shows a delayed reaction to macro trends, so while gold and oil are surging on geopolitical and inflationary pressures, BTC may take time to catch up,” said Eugene Cheung, Chief Commercial Officer at OSL.
“However, if risk sentiment shifts and investors look for alternative stores of value, Bitcoin could see renewed momentum in the coming weeks if this week’s Fed meeting aligns with investor expectations.”
Expectations for the Fed’s decision are significant; markets are largely anticipating that they will maintain current rates, but the focus will be on Chair Powell’s commentary about inflation and tariffs.
“We expect the Fed to hold rates steady this week as they wait to see how tariffs will impact the economy,” commented Jeff Mei, COO at BTSE, via Telegram. “Inflation is declining and job numbers are holding steady, indicating that there’s no urgency to make adjustments just yet.”
“They are likely to hold off for more data before taking any significant action later this year.”
While some market experts predict a potential subtle dovish pivot from the Fed, they believe that explicit declarations may not surface immediately.
“The Fed will likely observe some dovish trends on the margins,” stated Augustine Fan, Head of Insights at SignalPlus.
“The market will see if the Fed utilizes the recent trends in downside inflation and weaker unemployment claims to endorse a more pronounced dovish stance, though we don’t foresee major outcomes from this meeting, and the market’s attention will largely remain on the Iran-Israel situation.”
