Fed Rate Hike Looms, Crypto Markets Feel the Heat
Crypto markets are facing headwinds ahead of the Federal Reserve's (Fed) monetary policy decision on Wednesday. Bitcoin, Ethereum, and XRP have all declined in value as uncertainty grips risk assets.
The Fed is widely expected to raise interest rates to 3.75%-4.00%, which could weigh on risk assets. According to the FedWatch tool, market participants are pricing in 92.5% odds of a rate hike.
Analysts argue that recent inflation pressures and elevated Crude Oil prices driven by geopolitical tensions in the Middle East may support the central bank's need for tighter monetary policy.
Crypto Finance team stated in their Thursday market report, 'we expect the FOMC announcement and subsequent press conference to be a major volatility catalyst, with the potential for sharp and erratic moves across asset classes.'