TLDR
- Bitcoin trades around $112,100, down 1.8% in 24 hours but up 3.4% for the week as traders wait for Federal Reserve rate decision
- Traders are moving capital into USD stablecoins instead of actively trading, creating what market experts call a “dry powder economy”
- Gold drops to three-week low near $3,950 while Bitcoin holds support at $110,000 level
- Ethereum falls 3.8% to $3,970, underperforming Bitcoin as capital rotates away from altcoins
- Federal Reserve widely expected to cut rates by quarter-point, with markets in wait-and-see mode ahead of Wednesday announcement
Bitcoin traded at approximately $112,100 in early Asia trading hours on Wednesday. The price represents a 1.8% decline over 24 hours but maintains a 3.4% gain for the week.
The market is waiting for the Federal Reserve’s rate decision expected later this week. Prediction markets indicate a rate cut is almost certain to happen.
Market makers report traders are consolidating positions rather than actively trading. Enflux, a Singapore-based market maker, noted that Bitcoin appears to be holding steady instead of pushing higher.
OKX Singapore CEO Gracie Lin described current market conditions as a “dry powder economy.” Trading desks are accumulating positions quietly while keeping most capital in stablecoins.
Traders are rotating funds into USD stablecoins and focusing on deep order books. This behavior suggests preparation for larger price movements once the Fed announces its decision.
Capital Flows Shift From Gold to Bitcoin
Gold fell to a three-week low near $3,950 during Asia trading. The drop occurred despite forecasts from LBMA delegates predicting gold could reach $4,980 within a year.
Enflux stated that capital rotation appears to be underway from metals to digital assets. Gold’s decline strengthens the theory that investors are seeking higher-return alternatives in the current environment.
Bitcoin has established support at the $110,000 level. Buyers have consistently stepped in at this price point over the past week.
Traders are using less leverage compared to previous rallies. This approach indicates more cautious positioning ahead of the Federal Reserve announcement.
Stock Markets and Broader Economic Context
Japan’s Nikkei 225 rose over 1% to a record above 51,000. Asian markets showed mixed performance as investors anticipated dovish signals from the Fed.
U.S. stock futures posted modest gains Wednesday morning. The S&P 500 briefly crossed 6,900 for the first time in the previous session.
Easing tensions between the U.S. and China have provided support for markets. President Trump is scheduled to meet with Chinese President Xi Jinping during his trip to Korea.
Ethereum declined 3.8% to around $3,970. The cryptocurrency underperformed Bitcoin as traders moved capital into BTC and stablecoins.
The Federal Reserve is widely expected to deliver a quarter-point rate cut. This would be the first rate reduction since July.
Positioning has become more deliberate as sentiment improves following progress in U.S.-China trade talks. Futures markets continue to price in the expected rate cut.
