Fed Watch: Bitcoin Gives Up Weekend Gains, Analysts Say Not To Worry

Bitcoin and ether lost close to 3% and 4%, respectively, ahead of the Fed’s rate decision


tungtaechit/Shutterstock.com modified by Blockworks


Major crypto tokens retreated Monday and erased their weekend gains as traders gear up for a potentially volatile week ahead of the Federal Reserve’s interest rate decision. 

Bitcoin was trading about 2.5% lower Monday afternoon in New York, hovering around $23,000 after briefly approaching $24,000 on Sunday. Ether was similarly down, trading almost 4% lower and remaining around the $1,500 level. 

The whipsaw pattern has some traders crying “bull trap,” since both bitcoin and ether were unable to rally past their breakout levels, but analysts say there is likely steam left in the rally after this week’s uncertainty. 

“I’d really view this as natural volatility rather than any major market signal,” Darius Tabatabai, CEO of decentralized exchange Vertex Protocol, said. “With the Federal Open Markets Committee meeting this week, I’d expect the market to take a breather and positioning to slow down slightly as traders clean up their books ahead of the meeting.”

Markets are nearly certain the Fed will opt for a slower-paced hike this week and decide on a 25 basis point increase, according to data from CME. With cooling inflation, slowing growth and a general sentiment among international central banks that a pause in rate hikes is warranted, some investors are wondering if the Fed’s hawkishness is fading.

“Reaching peak hawkishness is one of our three keys to a bottom, and the most important one, so if the Fed has reached peak hawkishness that’s a powerful positive to consider,” Tom Essaye, founder of Sevens Report Research, wrote in a note Monday. 

Of course, with inflation still running far above the Fed’s 2% target, its work is not yet complete, Essaye added. 

Retracement or not, the next few days will be telling in terms of future price action, Marcus Sotiriou, market analyst at GlobalBlock, said in a note, Monday. If crypto tokens can manage to break through these key resistance levels, traders can rest assured the rally will be sustained, he added. 

Even amid Monday’s falter, crypto is poised to lock in a strong month. Bitcoin and ether are up about 40% and 32%, respectively, since the start of the year, a historic feat for January, Josh Olszewicz, head of research at Valkyrie Investments, said. A minor selloff is not yet telling of a lasting trend, he added. 

“Low timeframe technical analysis, including a rising wedge or channel with declining momentum on relative strength index, does support a near term pullback in price,” Olszewicz said. “This combination of technicals is commonly seen when rallies become overextended and can trap entrants who were late to the party.”

Don’t miss the next big story – join our free daily newsletter.


Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research report - cover graphics (1).jpg


In this report, we dive into crypto private market data to gather insights on where the future of the industry is headed. Despite a notable downturn in private raises, capital continues to infuse promising projects that aim to transform payments, banking, consumer experiences, community, and more, with 2023 being the fourth-largest year for crypto venture capital.


BUZZ holds shares of Coinbase, Robinhood and MicroStrategy


Opinion: Even though I didn’t pay for my “Diamond Hands” burger with BTC, don’t let that fool you into thinking that crypto’s development is futile


The results mark “a major positive inflection point,” one analyst says, as the exchange carries net income momentum into a crypto rally


While the slate of 10 US spot bitcoin funds have tallied $4.6 billion of net inflows thus far, half of the field is lagging the leaders


Trading volumes totalled $154 billion in Q4, including $125 billion in institutional volume


DeFi on Bitcoin is all the rage right now and Stacks is positioned to benefit