Cryptocurrency prices remained on edge on Monday morning as attention among investors moved to the Federal Reserve. Bitcoin crashed to $62,600 while the total market cap of all cryptocurrencies dropped to $2.32 trillion. This means that crypto investors have lost over $700 billion in the past few months.
Some cryptocurrencies held well on Monday. Monero (XMR) was trading at $125, higher than this month’s low of $105. Similarly, Tron (TRX) rose to $0.1210, which was 15% above its lowest point in April. It was its highest point since April 12th.
Meanwhile, Helium (HNT) token rose to $5.56, higher than the year-to-date low of $3.42. Some of the worst-performing tokens were the likes of Bonk, Celestia, Worldcoin, and Pyth Network.
The main catalyst for these cryptocurrencies will be the actions by the Federal Reserve, which will start its meeting on Tuesday. It will then deliver its interest rate decision on Wednesday.
Economists will be focusing on the tone and the bank’s dot plot since the bank is not expected to slash or hike interest rates. The dot plot is a document that illustrates the future actions of the bank.
This meeting comes at a time when the crypto industry is in a news drought since the biggest events have already happened. The Securities and Exchange Commission (SEC) has already approved 11 spot Bitcoin ETFs while the Bitcoin halving has happened.
Therefore, the next price action for these coins will depend on the sentiment among investors. The Fed will be a crucial part of all this. A sign that the Fed will cut rates soon will be a positive move for Bitcoin and other cryptocurrencies.
Still, all signs are that the Fed will embrace a hawkish tone since inflation remains at an elevated level. Data released last week showed that the headline Personal Consumption Expenditure (PCE) rose to 2.6% while the core PCE moved to 2.8%.
At the same time, the US economy is still holding well, with consumer spending rising. The economy grew by 1.6% in the first quarter. While this was lower than expected, it showed that the economy was still resilient.
Therefore, there is a possibility that the Fed will leave interest rates steady between 5.25% and 5.50% for a while. Such a move will likely put more pressure into riskier assets like stocks and cryptocurrencies.
