Bitcoin (BTC) was up 0.30% on strong daily volume. The price fluctuated widely throughout the day as the largest cryptocurrency by market cap at one point fell below $19,000. A sharp drop of 3.47% took place during the 02:00 UTC (6 a.m. ET) hour but prices reversed course as U.S. markets opened. The decline occurred on six times the average trading volume and implies an overreaction to the downside that was subsequently corrected. There was little in the way of economic data reports that could account for the decline.
Ether (ETH) was 1.72% higher, ending a slide that began after last week’s successful Ethereum Merge. A look at ether’s hourly chart indicates a similar pattern to BTC in that it also fell on higher volume during the 02:00 UTC hour, only to reverse course later. Ether has fallen approximately 17% since the Merge.
The CoinDesk Market Index (CMI), a broad-based market index that measures crypto performance across a basket of currencies, declined 0.35%
Economic Calendar: The highlight of the economic calendar this week will be Wednesday’s Federal Open Market Committee (FOMC) meeting and its expected interest rate decision.
Markets are ascribing an 80% chance that the Fed funds rate will increase by 75 basis points and a 20% chance that it will increase by 100 basis points, or 1%. Rates have not increased by 1% in over 40 years.
Between 1978 and 1981, the Federal Reserve raised rates by 1% seven times during the term of then-Chairman Paul Volcker because of soaring inflation.
U.S. Equities: Traditional equities rose. The Dow Jones Industrial Average (DJIA), tech-heavy Nasdaq composite and S&P 500 increased by 0.6%, 0.8%, and 0.7%, respectively.
Commodities: In energy markets, the price of WTI crude oil moved 0.42% higher, with natural gas increasing 1.6%. In metals, traditional safe haven gold rose just 0.01%, while copper futures increased 0.26%.
The Dollar Index (DXY) was relatively flat, down 0.03%