WASHINGTON (dpa-AFX) - Major cryptocurrencies are trading in the overnight red zone as markets reacted to the dissent by two FOMC members in support of a quarter percentage hike. Fresh worries about the AI trade, the disappointing earnings updates from some big tech companies as well as the spike in PCE inflation also made crypto markets jittery. Overall cryptocurrency market capitalization slipped close to half a percent and Bitcoin traded between $81,703 and $79,607 during the past 24 hours.
Crypto markets digested the decision by the Fed to maintain the target range for the federal funds rate at 3.75 to 4 percent. However, the hawkish tone in the Federal Open Market Committee's statement and the absence of a unanimous decision to hold rates steady weighed on crypto market sentiment.
The committee acknowledged that inflation remained elevated and that economic activity was expanding at a strong pace. The committee also pointed out that despite the high uncertainty attributed in part to the geopolitical developments, domestic spending has been resilient. The committee also placed on record its reading of the economy, highlighting the strong productivity growth, the robust capital investment, the job gains that have kept pace with the workforce as well as the unemployment rate that has changed little.
The FOMC assured price stability but said it needed more information to determine the policy stance appropriate to ensure a timely return of inflation to the Committee's 2 percent goal.
Sentiment weakened further as the Fed's preferred inflation gauge reinforced worries about the underlying price pressures in the economy. Data released by the U.S. Bureau of Economic Analysis on Thursday morning showed year-on-year PCE Price Index rising as expected to 3.6 percent from 3.4 percent in August. The core component thereof edged up as expected to 3.1 percent from 3 percent in the previous month. The month-on-month PCE price index rose as expected to 0.5 percent from 0.3 percent in August. The core component thereof recorded 0.3 percent, matching forecasts.
The CME FedWatch tool that tracks the expectations of interest rate traders currently shows the likelihood of a quarter-percent rate hike in the last FOMC of the year scheduled for December 9 at 81.6 percent. It was 84.2 percent a day earlier and 73.3 percent a week earlier. The hawkish repricing in Fed rate hike expectations have dented crypto market sentiment.
Overall cryptocurrency market capitalization has slipped 0.43 percent to $2.69 trillion. The rally is accompanied by an 18-percent increase in trading volumes. Bitcoin (BTC), the largest cryptocurrency is currently trading 0.54 percent lower on an overnight basis at $79,940.23. Bitcoin is saddled with losses of 4.9 percent in the past 30 days, and 8.7 percent in the year-to-date period.
Bitcoin Spot ETF products in the U.S. witnessed net inflows of $137 million on Wednesday versus $176 million on Tuesday. Market leader iShares Bitcoin Trust ETF (IBIT) topped with net inflows of $136 million.
Bitcoin is currently in the 12th position in the global ranking of all assets as per market capitalization published by companiesmarketcap.com. The leading cryptocurrency is positioned between 11th ranked Saudi Aramco and 13th ranked Tesla.
Ethereum (ETH) has shed 0.31 percent overnight to $2,315.83. The leading alternate coin has however lost 3.5 percent in the past week.
Ethereum Spot ETF products in the U.S. witnessed net outflows declining to $21 million on Wednesday from $60 million on Tuesday. iShares Ethereum Trust ETF (ETHA) topped with net outflows of $45 million.
Ethereum is currently ranked 65th in the global ranking of all assets as per market capitalization published by companiesmarketcap.com.
4th ranked BNB (BNB) slipped 0.78 percent overnight resulting in price decreasing to $742.55.
5th ranked XRP (XRP), a payments-focused cryptocurrency dropped 2.2 percent overnight and is currently trading at $1.28.
The price of 7th ranked Solana (SOL) lost 0.71 percent overnight to $100.29.
TRON (TRX) ranked 8th overall is currently trading 0.1 percent higher at $0.3313.
9th ranked Hyperliquid (HYPE) jumped 14.4 percent on an overnight basis to $91.02.
10th ranked Zcash (ZEC) dropped 0.61 percent overnight and the cryptocurrency is currently trading at $1,272.15.
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