Bitcoin falls 1.6% to $1.7 trillion ahead of Fed hike

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Bitcoin falls 1.6% to $1.7 trillion ahead of Fed hike

The global market cap fell 1.6% to $1.7 trillion at press time, despite the fact that other major coins didn't gain a lot of momentum on Tuesday evening.

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It Matters: Cryptocurrencies were lagging other risk assets like stocks, which flashed green ahead of an expected rate hike by the U.S. Federal Reserve.

S&P 500 and Nasdaq futures rose 0.1% and 0.2% at press time. The Federal Reserve is expected to increase its funds target rate by half a percentage point on Wednesday. According to a report by CNBC, a tapering of bond purchases by $95 billion a month is also on the cards.

The dollar is under pressure ahead of a possible rate hike. The dollar index, which measures the strength of the U.S. against six others, was unchanged at 103.46 at press time. The index was off of its Thursday highs of 103.93 when it touched a 20 year peak.

The simmering down of the dollar was interpreted as positive for risk assets by criptocurrency trader Micha l van de Poppe.

Van de Poppe believes that the dollar index is retreating to the 100 levels in a chart he shared on Twitter. The analyst said the Dollar is going to act after tomorrow, as well as the conclusion of the Federal Open Market Committee meeting due Wednesday.

Edward Moya, a senior market analyst, said thatBitcoin is in a wait and see mode. As investors are cautious about buying risky assets, a rally in virtual currency isn't going to happen soon. Moya wrote in a note seen by Benzinga that the sentiment on Wall Street remains fairly downbeat and needs a fresh catalyst.

There are significant battles between the bulls and bears on both the Bitcoin and ether sides, according to Santiment.

The behavior analysis platform said in a note that we might see the final capitulation, because of the falling wedges on the charts ofBitcoin andEthereum and rising lows ofBitcoin active addresses.