Altcoin Market Updates: Solana, XRP, Litecoin Emerge as Top Performers Ahead of Fed Decision

As the US Federal Open Market Committee (FOMC) kicked off its last meeting of the year on Tuesday, bullish traders placed last minute bets in anticipation of a third consecutive rate cut decision.

Crypto traders are keeping a close watch on the US Federal Open Market Committee (FOMC) meeting, betting on a third consecutive rate cut decision as the final day of the meeting kicks off on Tuesday.

Fresh capital continues to flow into the crypto sector, with a 3.7% gain, adding nearly $130 billion to the global crypto market capitalization.

Demand for privacy-focused altcoins surged following US sanctions on North Korean hackers, with Litecoin price rising 7% to cross the $130 resistance and Monero price rising 2% to hit the $218 mark.

Chart of the day: Traders sell altcoins, buy Bitcoin on risk-averse sentiment

In the first week of December, global markets experienced turbulence amidst escalating geopolitical tensions in South Korea and Syria.

While the crypto market rebounded following the release of a dovish US CPI report on December 10, key indicators suggest that investors are still cautious, with a low appetite for risk following the recent market crash.

The Altcoin Season Index, created by BlockchainCentre, tracks the ratio of altcoin market demand to daily capital inflows into Bitcoin, the largest and oldest cryptocurrency, to gauge this sentiment.

Typically, when investors adopt a risk-averse stance amid economic uncertainty, capital tends to flow into Bitcoin relative to the more volatile altcoins.

As evident in the chart below, the Altcoin Season Index fell from 75 on December 4 to 65 at the time of writing on Tuesday, indicating a 13% decrease in altcoin demand relative to Bitcoin since the market bottomed out on December 9.

This sharp decline highlights the cautious positioning of traders in the current market conditions.

Next, all eyes are on the Federal Reserve's (Fed) interest rate decision on Wednesday. If the Fed announces a rate cut as anticipated by analysts, it could bolster investor demand for risk assets andسرائيلي capital flows into altcoins.

Major crypto exchange Bybit will suspend withdrawal and custody services for French users on January 8, 2025, due to increased regulatory attention from French authorities.

Affected users are advised to withdraw their assets before the deadline to avoid any disruptions in their service.

Accounts with balances over 10 USDC will have their holdings transferred to Coinhouse, a licensed crypto custodian in France, upon verification.

For accounts below this threshold, Bybit will deduct a 10 USDC termination fee.

This move is part of a broader effort by authorities to strengthen oversight of crypto services in the region.

Eliza Labs, the company behind the ai16z AI agent platform, has joined forces with Stanford University's Future of Digital Currency Initiative to explore the interplay between AI and digital currencies.

The research will focus on developing trust mechanisms and governance models for AI agents in the crypto ecosystem.

The collaboration, supported by Eliza Labs, brings together Stanford professors and insights from leading crypto industry figures.

The initiative aims to enhance the reliability of AI agents and empower them to participate seamlessly in decentralized systems.