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BOE Rate to 3.5%: Bitcoin Falls, Markets Mixed Before Data

In an effort to allay investors’ concerns, Binance CEO on Wednesday claimed that things have “settled” at his cryptocurrency exchange. His remarks follow Binance’s temporary suspension of USDC stablecoin withdrawals on Tuesday as it undertook a “token swap.” Within a 24-hour period on Tuesday, Binance recorded withdrawals totaling $1.9 billion.

Approximately $1.14 billion in net withdrawals were reported by Binance on Tuesday, but the company tweeted that this wasn’t the greatest number of withdrawals it had ever handled. Deposits are coming back to Binance, according to the CEO.

His remarks follow Binance’s Tuesday the temporary suspension of USDC stablecoin withdrawals as it undertook a “token swap.” Zhao reported that Binance had noticed a rise in USDC withdrawals.

According to Zhao, the suspension of withdrawals was caused by the fact that some currency swaps had to be processed through an unnamed bank in New York that wasn’t operating. After a disruption of nearly eight hours, Binance resumed withdrawals.

Investors were on edge as a result of the incident, especially following the demise of the cryptocurrency exchange FTX and the subsequent arrest of its creator Sam Bankman-Fried, who is now being prosecuted on federal charges.

The last seven days have seen more than $3 billion in net withdrawals from Binance, according to blockchain analytics company Nansen. However, Alex Svanevik, CEO of Nansen, noted that the scenario is distinct from FTX, which had withdrawals to the “tune of multi-billion dollars.”

Zhao from Binance has made an effort to project strength within Binance as well.

Zhao stated in an internal message, “While we expect the next few months to be bumpy, we will get beyond this hard phase – and we’ll be better for having been through it.

Investors have demanded greater openness from Binance’ s operations. The corporation stated in a proof of reserve it had produced last month that its reserve ratio was 101%. Its assets are sufficient to cover consumer deposits, therefore.

Zhao claimed that it holds user asset reserves one-to-one during a discussion on Twitter on Wednesday. In the “coming couple [of] weeks,” he added, the business will disclose another set of proof of reserves.

According to the spokesman, “fully conducting a proof of custody reserves of this magnitude and scale is a very difficult process, which is new and unique to the market and involves different levels of internal and third-party verification on-chain than with traditional financial institutions.”

“Releasing the Bitcoin custody reserves was simply the first of many initiatives in the weeks ahead to provide more transparency and assurance of our custody reserves,” said the company.

In an effort to win back user trust, Binance noted that the company is working to create new techniques for confirming its assets in custody in light of recent incidents.

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Bitcoin Down After Fed Announcement

The announcement by Federal Reserve Chair Jerome Powell that the bank will increase the benchmark interest rate by an additional 50 basis points on Wednesday was roughly in line with forecasts. After the judgment was made public, the cryptocurrency market responded to the news by mostly trending downward.

BTC 24hrs

BTC 24hrs

According to analyst data, the announcement caused a slight whipsaw in the price of Bitcoin (BTC), which spiked to an intraday high of $18,377 before falling to a low of $17,663 in a few of hours before bulls bid it back to support over $17,800. 

Markets Mixed Ahead of Key Data Release

Following the most recent policy report from the Federal Reserve, stock futures were neutral early on Thursday. The Dow Jones Industrial Average futures rose 44 points. Nasdaq 100 futures were slightly lower while S&P 500 futures increased by 0.1%.

The Nasdaq Composite plummeted 0.76%, the S&P 500 declined 0.61%, and the Dow dropped 142 points during regular trade.

As investors processed the Federal Reserve’s most recent remarks following an increase in its overnight borrowing rate, the major indices reacted unfavorably. The central bank predicted a higher-than-expected terminal rate of 5.1% and indicated it will keep raising rates through 2023. The target range for rates is 4.25% to 4.5%, which is the highest in 15 years after Wednesday’s half-percentage-point increase.

Later in the day US Core Retail Sales m/m and Unemployment Claims as well as Philly Fed Manufacturing Index data will be on the deck. 

BoE Bank Rate Hike To 3.5%

In Britain, the Pound drops back ahead of BoE’s decision on the Official Bank Rate. On Thursday, at 12:00 GMT, the Bank of England increased its benchmark interest rate by half a percentage point to 3.5%, which is the highest level over a decade.

BoE Rate Trend

BoE Rate Trend

Analysts had anticipated to declare that its base rate will increase from 3% to 3.5%, marking the ninth consecutive vote to raise rates. Because of the increase, anyone with a tracker mortgage will immediately feel the pinch, losing an average of more than £300 annually.

In the absence of BoE Governor Andrew Bailey’s news conference, the vote split on the extent of the interest rate hike as well as the language in the policy statement, will be keenly examined.            

SNB Monetary Policy Assessment

The Swiss National Bank decided to raise its benchmark rate to 1% by 0.5 percentage points. It cannot be ruled out that more increases in the SNB policy rate would be necessary to ensure price stability over the medium term, the SNB says in its announcement of the decision.

According to the SNB, “inflation has substantially decreased in recent months” and was 3.0% in November, which is significantly lower than the UK’s (10.7%) or the Eurozone’s (10.0%) rates. 

Australian Employment Report

The Australian Bureau of Statistics employment data for the month of November will be released at 00:30 GMT on Thursday, and this will act as the immediate catalyst for traders of the AUD/USD pair.

According to market expectations, the headline unemployment rate could stay the same at 3.4% on a seasonally adjusted basis, while the employment change could be less than the prior addition of 32.2K, coming in at 19K. Additionally, a slight improvement in the participation rate—to 66.6% from 66.5%—is anticipated. 

NZD/USD Awaits New Zealand GDP

The markets are preparing for a meager growth of 0.8% q/q when New Zealand announces its GDP data for the fourth quarter later today. This comes after a 1.2% increase in Q3 when the economy was helped by a thriving tourist industry brought on by the border’s reopening.

Since October 1st, the New Zealand currency has improved considerably, adding roughly 400 points to its value relative to the US dollar. Since the following policy meeting isn’t until February 22nd, the Reserve Bank of New Zealand will be taking a lengthy vacation.

The release of the New Zealand GDP and the Fed rate announcement in today’s North American session could cause some volatility in the NZD/USD exchange market.

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  • Zahari Rangelov

    Zahari Rangelov is an experienced professional Forex trader and trading mentor with knowledge in technical and fundamental analysis, medium-term trading strategies, risk management and diversification. He has been involved in the foreign exchange markets since 2005, when he opened his first live account in 2007. Currently, Zahari is the Head of Sales & Business Development at TraderFactor's London branch. He provides lectures during webinars and seminars for traders on topics such as; Psychology of market participants’ moods, Investments & speculation with different financial instruments and Automated Expert Advisors & signal providers. Zahari’s success lies in his application of research-backed techniques and practices that have helped him become a successful forex trader, a mentor to many traders, and a respected authority figure within the trading community.

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