Crypto Markets Prepare for Fed Decision with Reduced Risk

As the crypto market braces for the Federal Reserve's interest rate decision, investors are taking a cautious approach. The anticipation of a rate cut has led to derisking, with bitcoin and ether trading lower, and smaller tokens experiencing even greater losses. The PENGU token, in particular, has seen a significant decline of over 50% since its airdrop on Tuesday. The front-end call premiums for BTC and ETH have also decreased, reflecting a more cautious market sentiment. However, if the Fed's decision and Chairman Jerome Powell's comments do not align with expectations, there could be a potential surge in risk assets, including cryptocurrencies. Tokens such as VIRTUAL and HYPE have shown promise, with gains of 11% and 4%, respectively. Nevertheless, the pace of future rate cuts may depend on Friday's core PCE data, and any surprises could impact the markets. The decline in Chinese government bond yields has also raised concerns about the global economy, making it essential to remain vigilant.