Key facts
- Bitcoin traded above $64,000 on Wednesday, with Ether and XRP also seeing gains.
- The Federal Reserve is set to announce its rate decision, with most traders expecting a hold but a significant minority anticipating a hike.
- A sharp selloff in South Korea's KOSPI index, driven by AI chip competition concerns, impacted Bitcoin's price.
- Over $670 million in leveraged crypto positions were liquidated in the past 24 hours.
- US spot Bitcoin ETFs experienced net outflows of approximately $11.64 million.
- Despite recent price drops, large Bitcoin holders are accumulating coins.
- The CLARITY Act's passage odds have decreased, removing a potential positive catalyst for the crypto market.
Bitcoin traded above $64,000 on Wednesday, with Ether and XRP also showing gains, as markets awaited the Federal Reserve's rate decision. The cryptocurrency's price movements are increasingly mirroring tech stocks, which experienced a significant downturn in Asian trading hours. This decline was triggered by concerns over China's advancing semiconductor manufacturing capabilities, impacting major players like Samsung Electronics and SK Hynix, which together form a substantial part of South Korea's KOSPI index that plunged as much as 11%.
Traders are closely watching the Federal Reserve's upcoming announcement. While approximately 70% of market participants expect the Fed to maintain its current interest rate for a sixth consecutive meeting, a notable 30% are pricing in a quarter-point hike. This uncertainty is amplified by insights from firms like Citadel Securities, which has informed clients of an expected surprise increase to bolster inflation-fighting credibility, and UBS, which indicated such a move would not be unexpected.
Recent data shows over $670 million in leveraged crypto positions were liquidated in the past 24 hours, contributing to the price decline. US spot Bitcoin ETFs also saw net outflows totaling around $11.64 million, with IBIT recording the largest single-fund redemption. Despite these short-term pressures, on-chain data suggests underlying accumulation, as wallets holding between 10 and 10,000 BTC have added nearly 19,700 BTC over an eight-day period.
Adding to market dynamics, the Senate has postponed a vote on the CLARITY Act to prioritize a Russia sanctions bill, diminishing a potential positive catalyst for the crypto market. Emirates Airline has announced a partnership with Crypto.com to accept Bitcoin and cryptocurrency payments for flight bookings, signaling growing mainstream adoption in the travel sector.