- Bitcoin traded near $113,000 ahead of the Federal Reserve meeting amid lower liquidity and a stronger dollar.
- Most major cryptocurrencies saw modest losses, with Ethereum down 1.4% and Solana and Binance Coin each dropping about 2%.
- The Federal Open Market Committee is expected to reduce benchmark rates by 25 basis points this week.
- Market liquidity is tightening partly due to stress in U.S. regional banks, reducing order-book depth on centralized exchanges.
- Bitcoin remains above key moving averages, supporting a constructive technical outlook despite fragile sentiment.
Bitcoin hovered close to $113,000 in Asian trading Wednesday as investors awaited this week’s Federal Reserve policy decision. Market sentiment was affected by decreasing liquidity and a stronger U.S. dollar, which pressured risk assets.
The cryptocurrency rose 4.5% over the last week but fell 0.7% in the past 24 hours, along with similar declines among major digital tokens. Ethereum traded at about $4,028, down 1.4%, while Solana’s SOL and Binance Coin’s BNB each fell roughly 2%. XRP remained slightly higher at around $2.62, continuing a strong weekly run as traders moved into tokens with high trading volumes.
Officials of the Federal Open Market Committee (FOMC) are widely expected to announce a 25 basis point reduction in benchmark interest rates to a range between 4.00% and 4.25% during their Oct. 28–29 meeting. Thomas Perfumo, a global economist at Kraken, said, “A 25bps cut this week appears highly probable, and the market is already pricing in another by December.” He added that despite these moves, crypto remains vulnerable to external shocks, as demonstrated by the sell-off on October 10.
Perfumo also noted a shift in demand between institutional investors and treasury allocations. Digital-asset treasuries such as MicroStrategy are slowing their purchases, but exchange-traded fund (ETF) flows continue to support crypto prices even during downturns, showing growing integration with traditional finance.
Market liquidity has tightened amid early signs of stress among U.S. regional banks and ongoing global uncertainties. Alice Li, partner at Foresight Ventures, explained, “Liquidity is tightening … inflation risks keep policymakers cautious,” and noted that order-book liquidity on centralized exchanges dropped to about 40% of pre-drop levels. Exchange-linked tokens led gains, while speculative altcoins remained volatile and event-driven.
Despite recent decreases, analysts observe stabilization since the large liquidation event on October 10, which erased nearly $1.2 billion in leveraged positions. The total cryptocurrency market capitalization is around $3.9 trillion, staying comfortably above key moving averages. According to analyst Alex Kuptsikevich of FxPro, bitcoin’s technical outlook remains positive: “BTC remains above both its 50-day and 200-day moving averages … the rebound from $108K support keeps the bull structure intact.”
Markets may experience increased volatility around the upcoming Fed announcement, especially if Chair Jerome Powell signals slower easing of monetary policy.
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