Crypto Markets Edge Higher as Traders Await Fed Rate Decision and Economic Data

Crypto assets, led by Bitcoin, posted modest gains as Asian trading opened on Monday, with investors adopting a cautious stance ahead of a pivotal week dominated by U.S. Federal Reserve policy decisions and key economic data releases. Bitcoin rose approximately 1.9% to trade near $91,256, maintaining its position close to the $90,000 psychological level. Ether gained 2.1% to $3,114, while the total crypto market capitalization increased by 1.3% to $3.18 trillion.

The market's focus is squarely on the Federal Open Market Committee (FOMC) meeting concluding Wednesday, where futures markets imply an 85% chance of a quarter-point interest rate cut. Analysts suggest such a cut could act as a catalyst for a significant year-end rally, with Akshat Siddhant of Mudrex noting a potential "Santa rally" that could push Bitcoin toward $100,000 if the Fed proceeds. He identified the $87,500 level as a crucial support zone for BTC.

However, the path is not without uncertainty. Some Fed policymakers have expressed reservations about cutting rates too early, and a decision to hold steady would shock the market. Beyond the Fed, traders are also monitoring Thursday's jobless claims data, where forecasts predict a spike to 221,000 from the previous 191,000, which could further bolster the case for monetary easing.

Market participants note that liquidity remains thin following a $19 billion leverage wipeout in early October, which has made market makers hesitant to return in size. This has contributed to Bitcoin trading in a narrow range, with its sensitivity to macro shocks contrasting with the recent strength in traditional safe-havens like gold and silver.

The week also features policy meetings from other major central banks, including Canada, Switzerland, and Australia, though they are widely expected to hold steady. The overarching narrative for crypto hinges on the Fed's actions shaping the U.S. dollar's trajectory and global liquidity conditions, factors that directly influence the appeal of hard-cap assets like Bitcoin.