Losses and nervousness for cryptocurrencies, as they await the Fed

Cryptocurrencies start the week with losses. Bitcoin (BTC), the reigning cryptocurrency, has fallen more than 1% in the last few hours and is once again trading for less than $17,000, while Ethereum (ETH), the largest 'altcoin' in the market, has dropped more than 2% and is once again moving away from $1,300.

According to experts, the market will behave with some tense calm as it awaits two of the big events for the remainder of 2022: the U.S. CPI data for November on Tuesday and the Federal Reserve's (Fed) monetary policy decision the following day, on Wednesday, December 14. According to consensus estimates, inflation will remain at 7.7%, while the core rate will rebound by one-tenth to 6.4% year-on-year. The market is already discounting that the next rate hike will be 50 basis points and is beginning to lean towards another hike of the same magnitude for the February 1 meeting.

The latest macroeconomic data from the United States seem to have scuppered the Fed's plans to moderate its policy with the arrival of the new year. Elevated inflationary pressures on wages worry the central bank, which could finalize its roadmap for the near future tomorrow (on Tuesday).

"Bitcoin seems stuck around the $17,000 area and that could continue until next week's FOMC (Federal Open Market Committee) decision," stated Edward Moya, senior markets analyst at Oanda, who believes that since this week is "the week of the year when we will see full participation," this circumstance could help "BTC have a more significant move."

"If Wall Street is confident that the Fed will finish raising rates after the February hike and there is no news on cryptocurrencies, Bitcoin could reach the $18,000 level. If the Fed signals further work is needed and if legislation looks crippling for Bitcoin, sellers could quickly emerge and make a push to retest the November lows," the expert added.

"From a technical point of view, while the global macro part can influence, there is still news to digest from the ecosystem and that can generate short-term volatility. The $15,500-$17,500 range continues to dominate the current market momentum. Above $17,500, we would go straight to $20,000. Losing $15,500 would mean going for $12,500," explained Javier Molina, senior market analyst at eToro.

In other market news, there have been widespread losses. Binance coin (BNB), for example, drops 3%, as well as Ripple (XRP), Cardano (ADA), Polygon (MATIC) and Polkadot (DOT). Litecoin (LTC) and Solana (SOL) fall 4%, while Dogecoin (DOGE) is the big loser of the day, dropping around 9%.