This week is shaping up to be pivotal for the cryptocurrency market, with uncertainties surrounding forthcoming events contributing to price fluctuations. Currently, with the exception of Celestia [TIA], all of the top 50 cryptocurrencies based on market capitalization are experiencing declines.
Bitcoin [BTC] saw a drop from $71,000 to $68,380, while Ethereum [ETH] is trading at $2,440 after a 2% decrease. These price movements have triggered significant liquidations in the derivatives market, with over $238 million liquidated in the past 24 hours.
The liquidations impacted more than 104,000 traders, with the largest amount of $9.9 million being liquidated on the OKX exchange.
Aside from the usual weekend market volatility, speculations on the US election polls on Polymarket may have influenced recent price shifts. As the election day draws closer, former US President Donald Trump’s decline in the polls by 6% over three days is a noteworthy development.
An anticipated victory for Trump is expected to yield positive effects on the crypto market, given his favorable stance on cryptocurrency during the campaign.
Anticipated FOMC Meeting
The upcoming meeting of the Federal Open Market Committee (FOMC) scheduled for 7th November is also generating anticipation. In the prior meeting, the committee implemented a 50 basis points rate cut, setting the stage for a recovery in risk assets like crypto.
Based on data from the CME FedWatch Tool, 98% of investors are expecting another rate cut of 25 basis points during the November meeting.
If the Federal Reserve follows through with the expected rate cut, cryptocurrencies are likely to experience an upward trend. A looser monetary policy tends to boost investors’ appetite for risk, thereby increasing demand for assets such as cryptocurrencies.
Following the September meeting, Bitcoin witnessed an increase of approximately 8% in just one week. A similar surge could potentially drive BTC to new all-time highs given its current value, which is only 7% below its peak.
Positive Sentiment Prevails in Crypto Market
Despite recent price downturns and heightened volatility, the crypto market sentiment remains optimistic, as reflected in the Fear and Greed Index which presently stands at 74.
With the market currently exhibiting signs of greed, this sentiment is likely to induce buying activity, leading to price upswings. Crypto traders appear optimistic about further gains post the recent market correction, citing catalysts such as the FOMC meeting and the historical trend of positive Q4 performance for cryptocurrencies.