Bitcoin and Altcoins Cautiously Bounced Back on Wednesday Ahead of the Federal Reserve Interest Rate Decision

Bitcoin (BTC) rose to $84,500 as it struggled to move above the psychological barrier of $85,000.

Bitcoin and many other cryptocurrencies edged higher on Wednesday ahead of the Federal Reserve interest rate decision. Bitcoin rose to $84,500 as it struggled to move above the psychological barrier of $85,000. BTC was up about 2% over the past 24 hours, and it is now trading at $84,488.00.

Other top-performing blue-chip cryptocurrencies were Uniswap (UNI), Stellar (XLM), Algorand (ALGO), and Pepe (PEPE). Uniswap jumped 12% to $6.90, while Stellar climbed 10% to $0.293. Algorand and Pepe were up over 9%, pushing the total crypto market cap to $2.79 trillion.

Crypto prices rose ahead of FOMC decision

The ongoing crypto recovery mirrored gains in U.S. equities. Major indices like the Dow Jones, Nasdaq 100, and S&P 500 rose by over 0.50%, while the U.S. dollar index pulled back.

Altcoins were also in the spotlight ahead of the Federal Open Market Committee (FOMC) meeting. The committee is due to conclude its meeting on Wednesday.

As the macroeconomic outlook becomes increasingly bleak, some economists believe that the U.S. could enter a recession by the third quarter.

According to a report by the Atlanta Fed, which is closely followed by traders, the country’s GDP is expected to shrink by 1.8% in the first quarter. A more dovish Fed stance could serve as a catalyst for both stocks and altcoins.

In a note, an analyst at IG said:

“The central bank is widely expected to remain paused with its interest-rate moves. At the same time, soothing prognostications from Powell around economic stability could help alleviate some of the jitters.”

SEC drops case against Ripple

Altcoins like Uniswap, Stellar, Algorand, and Pepe also jumped after the SEC concluded the long-running legal battle against Ripple Labs. That was a major milestone since the crypto litigation issue has been going on for almost five years.

This is it – the moment we’ve been waiting for. The SEC will drop its appeal – a resounding victory for Ripple, for crypto, every way you look at it.

The future is bright. Let's build.

— Ben Armstrong (aka "@BitBoyCrypto") (@BitBoy_Crypto) March 22, 2023

The case ended after the SEC dropped similar lawsuits against companies including Uniswap, Coinbase (NASDAQ:COIN), Kraken, Gemini, and OpenSea.

The SEC under the Trump administration has pledged to adopt a more crypto-friendly approach — a sharp contrast to the previous administration, where Gary Gensler focused heavily on litigation.

There are also signs that the SEC will approve several recently submitted spot crypto ETF applications. Financial firms have applied for funds tracking cryptocurrencies like XRP, Polkadot, Litecoin, Aptos, and Sui. ETF approvals could drive increased demand from Wall Street investors.