Crypto Market Likely to Remain Range-Bound Amidst Upcoming FOMC Meeting

The cryptocurrency market is expected to stay in a holding pattern as traders await key developments in late January, according to analysts at QCP Capital. Despite the U.S. Securities and Exchange Commission’s announcement of a Crypto Regulatory Task Force, the market has been drifting lower, with pressure on Bitcoin continuing to mount.

In a recent research note, QCP Capital analysts suggested that the crypto market might remain range-bound until there is more clarity on how the recent weak Consumer Price Index (CPI) reading has influenced the Federal Reserve’s upcoming policy decisions. “With no major catalysts before next week’s FOMC meeting, the market is likely to remain range-bound until there is more clarity on how the recent weak CPI reading has influenced the Fed’s upcoming policy decisions.”

Market Sentiment and Trading Activity

Crypto traders seem to be in a wait-and-see mode, with more clarity likely to come in February. According to recent data, spot Bitcoin exchange-traded funds (ETFs) in the U.S. faced a slowdown on January 22 as Bitcoin retraced back to around $22,000. Inflows into spot Bitcoin ETFs dropped by 69% from the previous day, reaching $248.65 million on Wednesday.

Notably, the entire inflows recorded on the day came from BlackRock’s IBIT, which drew in $344.28 million from investors. This slowdown in trading activity suggests that traders are cautious and waiting for further clarity on market-moving events.

Expert Insights and Market Predictions

Initial optimism in the crypto markets following Donald Trump’s election might fade, as anticipated policy changes were likely already priced in before he assumed office.

Kadan Stadelmann, CTO of Komodo Platform, previously noted that Trump’s early days in office could become a “sell the news” event. This sentiment is echoed by other experts, who predict that big moves are coming for Bitcoin and the crypto market as a whole.

As the market remains range-bound, traders are advised to stay informed and keep a close eye on upcoming events, including the FOMC meeting. Key factors to watch include:

  • FOMC meeting: The Federal Reserve’s upcoming policy decisions will likely impact the crypto market.
  • CPI readings: Weak CPI readings may influence the Fed’s policy decisions.
  • Regulatory developments: The U.S. Securities and Exchange Commission’s Crypto Regulatory Task Force may bring clarity to the market.

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