Bitcoin is treading water ahead of the Fed meeting, which will end the week marginally higher

Bitcoin (BTC-USD) is on track to end the week marginally higher, treading water ahead of the Federal Reserve’s meeting next week. This follows a brief appearance last week by Fed Chair Jerome Powell signaled a slower pace of rate hikes soon.

The Fed meets on Wednesday, where it is widely expected to raise interest rates by 50 bps.

“Bitcoin appears to be stuck around $17K and that could continue until next week’s FOMC decision. If the Fed signals that more work needs to be done and if legislation looks crippling for bitcoin, sellers could quickly emerge and make a push for to retest the November lows.” said Edward Moya, Senior Market Analyst, OANDA.

The top cryptocurrency rose to $17.38K on Monday, its highest level in a month after the collapse of crypto exchange FTX (FTT-USD) sent prices spiraling. Bank of America believes there are still silver linings as the fallout will result in increased regulatory scrutiny, which could enable more institutional engagement.

The global cryptocurrency market cap is $852.08 billion, down 0.68% over Thursday, according to CoinMarketCap.

FTX updates

• Sam Bankman-Fried, founder of failed crypto exchange FTX (FTT-USD), is reportedly being investigated by US federal prosecutors for manipulating the prices of terraUSD (UST-USD) and its sister token luna (LUNC-USD) in May leading to their collapse.
• SBF said he is “willing to testify” next week before the House Financial Services Committee.
• Alameda Research, the trading firm affiliated with FTX, was said to have been secretly funding crypto news site The Block for more than a year.
• As FTX continues to send ripples through the industry, Canada’s largest pension fund CPP Investments has reportedly stopped thinking about investment opportunities in the crypto space. CPPI told Reuters it has not made any direct investments in crypto.
• Goldman Sachs is reportedly looking to spend tens of millions of dollars to buy or invest in crypto firms at a bargain following FTX’s fall.
• Cryptocurrency exchanges Bybit and Swyftx announced layoffs, citing the fallout from the FTX collapse and the current bear market.

Regulatory news

• The SEC advised listed companies to disclose to investors any potential impact from the crypto market, as well as their risk exposure to bankruptcies in the space.
• Shares of Silvergate Capital (SI) continued to take a beating after US state senators sent a letter to CEO Alan Lane, asking for clarity on its relationship with SBF’s crypto empire. Earlier this week, Lane said his company has an adequate liquidity position and a robust balance sheet despite the turmoil in the crypto market.

Bitcoin price

Bitcoin (BTC-USD) fell 0.48% to $17.12K at 5:27 PM ET, while Ether (ETH-USD) fell 1.48% to $1.26K.

Bitcoin (BTC-USD) has been trading in a tight $16.9K-$17.38K range this week. “If Wall Street is convinced that the Fed will be done hiking after the February rate hike and no new breakout in crypto, you could see bitcoin run towards the $18K level,” said OANDA’s Moya.

Standard Chartered said bitcoin (BTC-USD) could tank another ~70% to $5K in 2023 as it factored in falling interest rates and potentially more crypto-related bankruptcies.

SA contributor Practical Crypto Capital expects further macro pressure on bitcoin, while Ariel Santos-Alborna believes the worst has been priced in and now is the time to consider opening or adding to a position.

Crypto-related stocks that finished in the red on Friday include: Marathon Digital (MARA) -7.2%Coinbase (COIN) -6%Riot Blockchain (RIOT) -4.1%Bitfarms (BITF) -3.9%Robinhood Markets (HOOD) -2.2%.