Major cryptocurrencies are trading higher ahead of a key Federal Reserve rate decision expected to deliver a 25 basis point cut on Wednesday. Investors are also watching Bank of Japan policy, Mag 7 tech earnings, and a Trump-Xi summit for potential market impacts. Bitcoin has risen to $113,600, while XRP surpasses its 200-day moving average.
Major cryptocurrencies are advancing amid anticipation of several pivotal economic events this week. Bitcoin climbed 1.7% over the past 24 hours to $113,600, marking a three-day winning streak following seller exhaustion near its 200-day simple moving average (SMA) at $108,800. However, it has not yet broken above the 50-day SMA at $114,250, a level seen as crucial for restoring bullish momentum.
Other tokens showed stronger gains, with XRP up 3% to $2.6542, moving past its 200-day SMA at $2.60 and signaling renewed bullishness. Ether reached $3,949.95, and Solana hit $200.29, both also rising 3% in the last day.
The Federal Reserve is widely expected to reduce its policy rate by 25 basis points to 4% on Wednesday, the third such cut since September last year, totaling 150 basis points of easing. CME Fed funds futures indicate near certainty for this cut and another in December, with further reductions anticipated next year, which could sustain bullish trends in bitcoin and the broader crypto market.
Fed Chair Jerome Powell's press conference will be closely monitored, as the decision lacks economic forecasts. Powell is likely to emphasize growing concerns over the job market, describing tariff-induced inflation as transitory. He may face questions on the U.S. government shutdown but is expected to downplay its impact, adhering to September projections of 3% annual price growth in 2025 falling to 2.6% in 2026, and unemployment at 4.5% in Q4 2025 easing to 4.3% by 2027.
A potential highlight is discussion on quantitative tightening (QT). Powell recently stated, "Our long-stated plan is to stop balance sheet runoff when reserves are somewhat above the level we judge consistent with ample reserve conditions. We may approach that point in coming months." Reserves have dipped below $3 trillion, suggesting tighter liquidity.
On Thursday, the Bank of Japan is forecast to hold rates steady, though updated economic projections could stir volatility. Markets price in no change now, a half-point cut in December, and a full cut by early 2026.
Earnings from Mag 7 firms like Apple, Meta Platforms, Alphabet, and Microsoft will reveal insights into AI spending, a key driver of risk assets since 2023; any slowdown might spur caution.
Additionally, U.S.-China trade tensions have eased with reports of an impending deal ahead of Presidents Trump and Xi's Thursday meeting in South Korea during the APEC Summit, though disappointment could trigger risk aversion.