Bitcoin Holds $113K as Traders Turn Defensive

What to Know:

• Bitcoin’s price is holding steady, supported by long-term trends despite short-term market jitters.
• Anticipation of the Federal Reserve’s policy decision is impacting crypto market sentiment.
• XRP shows resilience, indicating potential shifts in trader focus toward high-volume tokens.

Bitcoin is maintaining levels near $113,000 as traders brace for the Federal Reserve’s upcoming policy announcement amidst concerns about liquidity and a strengthening dollar. While Bitcoin has shown a 4.5% increase over the past week, it experienced a slight dip of 0.7% in the last 24 hours, mirroring trends among other major tokens. XRP has demonstrated strength, suggesting a rotation towards tokens with substantial trading volumes.

The market is closely watching the Federal Open Market Committee (FOMC) meeting scheduled for this week, where a 25 basis point rate cut is widely anticipated. This macroeconomic backdrop continues to exert a dominant influence on the current crypto cycle. The balance between institutional inflows and treasury demand has also shifted, influencing near-term momentum despite the stickiness of longer-term capital.

“Demand from digital-asset treasuries like MicroStrategy is slowing, but ETF flows continue to skew bullish, even during drawdowns,” he said. “That resilience shows crypto’s growing foothold with traditional finance, even as short-term risk tolerance has dropped since the October liquidation event.”

Tightening liquidity conditions are another factor under scrutiny, with reduced market depth across centralized exchanges. Early signs of stress among U.S. regional banks could potentially influence the Federal Reserve’s quantitative tightening (QT) policy. BNB-led names have shown relative outperformance, stabilizing after a period of deleveraging.

Despite recent market corrections, analysts suggest that crypto markets are stabilizing, with total crypto capitalization remaining comfortably above key moving averages. Bitcoin’s technical setup is viewed as constructive, supported by its position above both its 50-day and 200-day moving averages. However, increased volatility is expected around the Federal Reserve’s announcement, particularly if the tone suggests a slower pace of easing.

As the market navigates these crosscurrents, the focus remains on the interplay between macroeconomic factors, regulatory developments, and evolving investor sentiment. The resilience of Bitcoin and the performance of XRP underscore the dynamic nature of the crypto market, with traders and investors closely monitoring these trends for future opportunities.

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Source: Original article