Investors Await Fed Rate Hike Decision As Bitcoin, Ether Gain On Recent Gains

As investors prepared for the completion of the Federal Reserve's two-day policy meeting on Wednesday, cryptocurrency prices edged up modestly on Tuesday.

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Following a day in which it traded below the $28,000 mark, bitcoin was once again trading over this mark. To $28,239.75, up more than 1.3%, according to Coin Metrics. To $1,799.12, ether increased by 2.4%.

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The latest policy decision from the Fed's March meeting, which will end Wednesday afternoon, is eagerly anticipated by investors. The central bank is widely expected to increase borrowing costs by 25 basis points.

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According to the FedWatch tool from CME Group as of Tuesday afternoon, there is a roughly 83% chance that the Fed will raise interest rates by a quarter point. The remaining 17% predict that there won't be an increase and that Chairman Jerome Powell will begin to dial back his aggressive tighten campaign due to concerns over a possible financial contagion.

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While some investors attribute the latest cryptocurrency rise to waning trust in centralized organizations like Silicon Valley Bank and Credit Suisse, many others insist that inflation and Fed policies continue to be the greatest drivers of bitcoin's price.

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But, it is "showing upside exhaustion indications on both weekly and daily timescales, and into what should be quite severe resistance in the 28k-30k zone," according to BTIG's Jonathan Krinsky. Bitcoin has been "a beneficiary of the banking woes."

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Now, Bitcoin is up approximately 21% for the month and nearly 70% for the year 2023.