The cryptocurrency market has witnessed a dramatic fall in meme coin trading volumes, which have dropped from $35 billion to less than $18 billion within a single month. This decline highlights the waning enthusiasm for meme coins amid broader market turbulence.
Crypto billionaire Arthur Hayes has forecasted significant volatility in Bitcoin and the broader crypto market around January 20, the day of Donald Trump’s oath-taking ceremony. Hayes revealed that his Maelstrom investment fund plans to scale down its positions ahead of the anticipated market upheaval.
The cryptocurrency markets are preparing for heightened volatility as the Federal Reserve’s interest rate decision looms. Bitcoin (BTC) has dipped by 2.50% over the past 24 hours, while Ethereum (ETH) has dropped by 4.50%. The global crypto market capitalization has fallen to $3.79 trillion, reflecting a 4.80% decline.
Despite recent corrections, the Fear and Greed Index remains at an "extreme greed" level, with a reading of 81 signaling overbought conditions, potentially amplifying market risks.
Jerome Powell, chair of the US Federal Reserve, is set to announce the latest monetary policy at 12:30 am IST. Market expectations lean toward a 25 basis point (bps) rate cut. However, concerns are growing about a potential hawkish tone that may signal a slower pace of monetary easing in 2025.
Following the Fed’s policy announcement, major events like the Bank of Japan’s Policy Rate, Bank of England Rate, US Final GDP, Unemployment Claims, and Core PCE Price Index are expected to shape market sentiment. Hawkish signals or strong economic data could lead to further crypto market volatility and potential sell-offs.
On-chain analytics indicate a surge in profit booking by short-term Bitcoin holders. According to Santiment, BTC holders with assets held for 90 to 365 days have been actively taking profits as prices crossed $100,000. In contrast, long-term holders, who were more active in the $90,000–$100,000 range, have shown limited activity despite the price surge.
Market analysts are forecasting a significant downturn as January 20 approaches, coinciding with Donald Trump’s presidential inauguration. Hayes highlighted that his investment strategy involves reducing exposure to risk during this period of expected market turbulence.
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