Bitcoin treads water, other crypto retreats ahead of US Fed decision on interest rates

Bitcoin traded flat below the US$28,000 mark on Tuesday morning in Asia, while Ether and most of the other top 10 non-stablecoin cryptocurrencies retreated after a week of gains on bank failure concerns. Polkadot led the losers, while Solana stood up. U.S. stocks rebounded on Monday as financial authorities injected liquidity into markets and announced other measures to ease concerns about weakness in the global banking system. Investor focus is now shifting back to inflation as the Federal Reserve announces its interest rate decision on Wednesday.

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Fast facts

• Bitcoin was up 0.04% in the last 24 hours to $27,920 at 09:00 AM in Hong Kong, and is up 15.00% in the last seven days, according to CoinMarketCap data. The world’s largest cryptocurrency hit a nine-month high of $28,527 on Monday.

• Ether fell 1.32% to USD 1,753, for a weekly gain of 4.72%. The token has not kept up with the gains in Bitcoin, as the Shanghai hard fork that will allow the withdrawal of staked ether is now April 12 was expectedor in about three weeks, and analysis is mixed on whether this could generate new sales of the token by investors looking to lock in profits.

• Polkadot led the losers with a fall of 4.18% to trade at $6.16 to remain unchanged for the seven days.

• Apart from Bitcoin, Solana was the only top 10 non-stablecoin cryptocurrency to rise during the 24-hour period. The token added 3.13% to USD 22.57 for a weekly gain of 10.80%. The Solana Foundation concluded Grizzlython over the weekend, the largest decentralized app (dapp) competition held by Solana. More than 800 projects were submitted and the winners will be announced at the beginning of April.

• The total crypto market cap fell by 0.73% in the last 24 hours to $1.16 trillion. Total trading volume in the last 24 hours rose 16.78% to USD 76.81 billion.

• US stocks rebounded on Monday as fears of more bank failures eased. The Dow Jones Industrial Average rose 1.20%, the S&P 500 rose 0.89%, and the Nasdaq Composite Index rose 0.39% higher.

• Investors welcomed moves by authorities over the weekend to orchestrate the acquisitions of Signature Bank and Credit Suisse. Shares of New York Community Bancorp, which will buy Signature Bank, rose 31.65%. Shares in UBS Group AG rose 3.30% after it bought Credit Suisse, according to data from Yahoo Finance.

• Despite the general stabilization, the share price of embattled First Republic Bank fell 47.11% on Monday, after S&P Global downgraded the bank’s credit rating on Sunday for the second time in five days, saying the recent injection of $30 billion from other major US Banks may not be enough to solve Republic Bank’s “significant business, liquidity, funding and profitability challenges.”

• Some commentators have said the banking woes can be partly attributed to the eight rate hikes by the Federal Reserve since March 2022 to curb inflation. US interest rates are between 4.5% and 4.75%, the highest since October 2007.

• The Fed will announce its next decision on interest rates on Wednesday, and analysts at CME Group expect a 73.8% chance the Fed will raise by 25 basis points. The probability that the Fed will leave interest rates unchanged due to concerns about bank solvency is at 26.2%, up from 23.2% on Monday.

• Ahead of the opening of US stock markets on Tuesday, US stock futures rose from 09:00 in Hong Kong. Dow Jones Industrial Average futures and S&P 500 futures both rose 0.18%. The Nasdaq Composite Index rose 012% higher.

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