Rally hits pause

On Tuesday, as segments of the U.S. stock market continued to slide, Bitcoin snagged the spotlight, surging to still yet another all-time high of roughly $108,100, according to CoinGecko.

However, today there's been some profit-taking ahead of a Fed meeting later this afternoon, one that could bring some form of unsettling plot twist reflecting inflation-stickiness concerns. As of 7:22 a.m. (EST), BTC was about $105,000, or roughly 3% off of the ATH.

Juggernaut XRP, third-largest crypto, got to as high as $2.70 yesterday when crypto momentum was at a fever pitch and the marketplace was (thanks to platforms such as Uphold) saying hello to a Ripple-issued, dollar-pegged digital asset running on the XRP Ledger.

The shiny object today is PENGU, newly born, freshly airdropped native token of the Pudgy Penguins NFT collection. Since launching yesterday PENGU waddled, and then flat-out sprinted, from barely one cent to as high as seven cents before settling, at last check, near three cents. Despite posting a 40% loss over 24 hours, PENGU now boasts a market capitalization of $2 billion, making it the No. 72 token on the CoinGecko chart that ranks digital assets in terms of their cap size.

Meanwhile, in the world of more traditional assets, the technology-stock-laden Nasdaq composite index continues to hover near its record level above 20,100, even as broader-market indexes, such as the Dow and the S&P 500, are mired in losing streaks.

Total crypto assets fell 4.3% to $3.83 trillion. That was at 8:08 a.m. (EST) today. It looks like CoinGecko's universe of tracked coins (more than 15,000 of them on 500 exchanges) reached a combined market capitalization of $3.97T yesterday at about 10 a.m. (EST).

All of the Big Ten coins are shading red over the past 24 hours. Oddly, Dogecoin (DOGE), beloved by titanic figure Elon Musk, has declined 5% to below 40 cents. A couple of times in the past few weeks, DOGE looked as if it might steam to "king of the world" status, or at least fifty cents, only to strike a proverbial iceberg. 

Memecoins generally are "hit or miss" as the saying goes, and some big ones have been tumbling even amidst the Trump pump. The sub-category of "dog-themed" memecoins has collectively shed 3.4% in the past week.

Among the worst-performing dog-themed memecoins over the past month are BONK (-30%), WIF (-28%) and FLOKI (-16%).

What are the chances of a nasty Fed curveball later this afternoon?

Well, consider 9 out of 10 economists polled by FactSet are forecasting that the central bank will cut its benchmark rate. We're talking, of course, about the federal funds rate, or the rate banks charge each other for short-term loans. The polled economists think the cut will be 0.25 percentage points, taking the current target range of 4.5%-4.75% down to a range of 4.25%-4.5%. It would mark the Fed's third consecutive cut. The long-awaited era of looser monetary policy would seem to be at hand.

K33 Research analysts sure do not anticipate any negative surprises. In fact, the K33 crew predicts that after the Fed wraps up its meeting, the stage is set for a rally in crypto, as serene macroeconomic conditions wash over contented hearts, enabling Bitcoin to keep soaring through the holidays.

But beware of Fed gifts that come wrapped in in hawkish bubble tape.

"The upcoming Fed meeting isn't just about setting policy," Investor's Business Daily said. "It's also about setting expectations for 2025 and beyond, and Fed policymakers may provide something of a reality check about how low rates will go."

The market for futures tied to Fed moves currently assigns 16% odds to the prospect of a rate cut (a fourth straight) delivered at the next meeting in January. As for the rest of 2025, the markets are pricing in two additional quarter-point moves to have arrived by year's end.

At the same time, markets see a decent (40%) chance that 2025 brings just a single, 25-basis-point cut, hardly a macro tailwind.