Bitcoin, Ripple Sink on Profit-Taking After FOMC Rally

Bitcoin (BTC) and major cryptocurrencies experienced notable declines amid profit-taking activities following a brief rally on Thursday. As of Friday morning in Asian time, the overall cryptocurrency market capitalization shrunk by 3.2%, resulting in BTC’s price plummeting from $86,000 to below $84,000. Ethereum (ETH) also slipped under the critical support level of $2,000, while Solana’s SOL faced a sharp 5% drop.

In contrast to the overall market trend, XRP, which had seen a significant 10% uptick midweek, registered a modest 4.8% weekly gain. Meanwhile, Binance Coin (BNB) maintained some upward momentum, contributing to a weekly increase of over 8%. As of the latest update, only Tron’s TRX and TON were experiencing upward movements, both rising by 2%.

Tron’s TRX was launched on the Solana platform for the first time on Thursday, a strategic move aimed at expanding its user base. On the other hand, TON attracted retail investors’ interest following news that the Toncoin Foundation secured over $400 million in investments from venture capital firms, signalling strong backing for the cryptocurrency.

The recent surge in Bitcoin’s price was partly fueled by Wednesday’s Federal Open Market Committee (FOMC) meeting, which provided the market with the much-anticipated affirmation of no rate cuts. However, the meeting also revealed the Fed’s intention to wind down its quantitative tightening program starting in April — a move that many traders interpreted as a potential indirect signal for rate cuts.

Dr. Sean Dawson, the head of research at options platform derive.xyz, noted in an email to CoinDesk that the probability of BTC surpassing the $100,000 mark by June 30 has risen from 20% to nearly 30% within 24 hours. Dawson also highlighted that the likelihood of ETH maintaining its position above $2,000 has diminished to a near-fifty-fifty chance, down from 40% the previous day. Notably, about 60% of ETH options traded on Derive.xyz were calls, demonstrating bullish sentiment, while 34% of BTC options were bought, indicating demand for downside protection.

FxPro’s Alex Kuptsikevich has expressed caution, observing that the crypto market has yet to break past its 200-day moving average, estimated to be close to $2.9 trillion. He emphasized the importance of Bitcoin holding above the critical support level of $80,000, which, if maintained, could rekindle interest in purchasing a variety of cryptocurrencies that haven’t seen significant gains recently, including altcoins and memecoins.