Crypto Market Daily Highlights – BTC Bucked a Fed-Driven Pullback

Key Insights:

• It was a mixed Wednesday session for the crypto top ten. BTC bucked the trend, extending its winning streak to three sessions.
• A hawkish Fed interest rate hike and the NASDAQ Index sent the broader crypto market into negative territory.
• Despite the bearish session, the loss was modest, with the crypto market cap falling by $2.92 billion to $824.30 billion.

It was a mixed Wednesday session for the crypto top ten.

DOGE led the way, with ADA, MATIC, and XRP struggling. BTC bucked the trend, extending its winning streak to three sessions. Notably, BTC revisited $18,000 for the second time since November 10.

Through the morning and early afternoon, hopes of a dovish 50-basis point Fed rate hike delivered crypto market support. However, a hawkish 50-basis point interest rate hike sent riskier assets into negative territory.

Despite the latest Jobs Report, ISM Non-Manufacturing PMI, and inflation numbers reflecting elevated inflationary pressures, the markets bet on a Fed pivot and a less aggressive interest rate path to bring inflation to target.

In contrast, the Fed upwardly revised its interest rate projections for 2023, 2024, and 2025. While upwardly adjusting its Federal Funds Rate projections to peak at 5.1% compared with 4.6% in the September projections, the Fed revised down growth forecasts for 2023 and 2024.

Also bearish for riskier assets, the Fed upwardly revised its unemployment rate and inflation projections for 2023, 2024, and 2025.

The market reaction to the hawkish 50-basis point rate hike was evident upon the release of projections and during Fed Chair Powell’s press conference.

Binance Still Under the Spotlight

While the Fed was the main event, Binance continued to draw interest following the news of US authorities planning to charge the exchange and its executives with financial crimes.

On Capital Hill, lawmakers raised concerns over the possible ramifications of a Binance collapse on the crypto industry and consumers. The Senate Banking Committee held the hearing to discuss the demise of FTX. Former FTX CEO Sam Bankman-Fried did not attend the hearing after being arrested the day prior.

One takeaway from the hearing was the prospects of far more stringent regulatory measures to prevent a repeat of the FTX collapse.

Despite Binance being under the spotlight, BNB tracked the broader crypto market throughout the session.

The Thursday Crypto Market Session

Today, the focus will shift to the US economic calendar and FOMC member chatter. The weekly jobless claims, Philly Fed Manufacturing PMI, and retail sales figures will likely have the most influence.

Following the Fed’s interest rate decision on Wednesday, an unexpected spike in jobless claims, a slump in retail sales, and a deeper contraction in manufacturing sector activity would test the appetite for riskier assets.

On Wednesday, the NASDAQ Index fell by 0.76% in response to the hawkish Fed interest rate hike. This morning, the NASDAQ mini was up 22.5 points.

Crypto Market Hits Reverse on Hawkish Fed and NASDAQ Index Fall

After a range-bound morning session, the crypto market cap rose to a late afternoon (Pre-Fed) high of $848.13 billion. However, the hawkish Fed rate hike sent the crypto market cap to a late low of $817.89 billion.

Late in the session, the crypto market reduced the deficit to end the day at $824.30 billion, marking a loss of $2.92 billion.

The Crypto Market Movers and Shakers from the Top Ten and Beyond

It was a mixed Wednesday session for the crypto top ten.

BTC bucked the trend, rising by 0.16%.

However, it was a bearish session for the rest of the crypto top ten.

DOGE fell by 3.18% to lead the way down, with ADA (-1.91%), MATIC (-2.27%), and XRP (-2.43%) struggling.

However, BNB (-1.58%) and ETH (-0.98%) saw relatively modest losses for the session.

From the CoinMarketCap top 100, it is a mixed session.

XDC network (XDC) and toncoin (TON) led the way, with gains of 7.16% and 13.16%, respectively. THORChain (RUNE) was also a front-runner, rising by 3.35%.

However, stacks (STX) led the way down, sliding by 7.85%. Internet computer (ICP) and fantom (FTM) also struggled, falling by 4.09% and 3.41%, respectively.

24-Hour Liquidations Slide Back to Below Normal on Hawkish Fed

Over 24 hours, crypto liquidations decreased as the market responded to the heavily anticipated Fed interest rate decision, projections, and Powell press conference.

At the time of writing, 24-hour liquidations stood at $59.82 million versus $132.06 million on Wednesday morning.

Liquidated traders over the last 24 hours also decreased. At the time of writing, liquidated traders stood at 15,787 versus 31,207 on Wednesday morning. Crypto liquidations declined over 12 hours and one hour while rising over four hours.

According to Coinglass, 12-hour liquidations fell from $93.61 million to $54.76 million, with one-hour liquidations down from $1.24 million to $0.350 million. However, four-hour liquidations rose from $2.33 million to $6.92 million.

The chart below shows market conditions throughout the session.