What crpto tranders can expect from Today’s FOMC Meeting and Its Impact on Bitcoin and Crypto Traders
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FOMC Meeting: Impact on Bitcoin and Crypto
Bitcoin and the cryptocurrency market have a lot riding on today’s Federal Open Market Committee (FOMC) meeting, which begins at 2:00 pm Eastern Standard Time (EST). Investors are watching this event closely to glean information about the Fed’s next policy decisions.
The interest rate decision is the main event, and it will be announced at 2:00 pm EDT, followed by a press conference at 2:30 pm EDT.
Experts have been predicting a break in the Fed’s rate hiking cycle since March 2022, and this has created considerable anticipation.
There is presently a 95.3% chance, as calculated by the CME FedWatch tool, that no decisions will be made at today’s meeting.
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This pause gives the central bank time to assess the results of its anti-inflation policies while maintaining existing interest rates.
Major financial institutions agree with this assessment, with only Citigroup forecasting a further rate hike of 25 basis points from the Federal Reserve. This includes Goldman Sachs, J.P. Morgan, and Morgan Stanley.
What Crypto Traders Can Expect
Particularly noteworthy is the unveiling of the updated “dot plot,” which shows how individual Fed members see interest rates changing in the future. In the opinion of market analysts, a rise in the dot plot might cause a rise in the dollar index (DXY) and a fall in the stock market.
As a result, these types of changes could affect the direction of Bitcoin and similar cryptocurrencies.
A rate drop by the Federal Reserve is expected to occur by the end of 2023, according to recent projections from the US bond market.
Director of fixed income at Richard Bernstein Advisors Michael Contopoulos, on the other hand, thinks the outcome could be more black-and-white. He claims the Fed will not reduce interest rates, or if economic growth slows sharply, it will make major reductions.
In his opinion, “higher than expected CPI could very well tilt them to a hike,” which is what Contopoulos predicts will happen. If not, I believe they will halt.”
A recession may not happen until the next year, according to bond market specialists, who predict rate cuts of 200 basis points in 2024. This evaluation is consistent with the view held by many experts in the field.
However, the Bank of Canada’s actions show that the Fed might begin rising rates after the pause, as they hiked rates by 25 basis points in June following a two-month hiatus.
The CME FedWatch Tool predicts a 63% chance of a rate increase of 0.25% in July. The publishing of the dot plot today is widely seen as a key factor in determining the future direction of equities, Bitcoin, and other cryptocurrencies.
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If the dot plot shows downward revisions, it might spark a buying frenzy in BTC and other cryptocurrencies. In contrast, bullish would be upward forecast revisions, which would signal a “higher for longer” strategy.
Bitcoin’s price is in a vulnerable state, according to on-chain expert Ali Martinez. In the time before the interest rate decision, the price has been holding steady.
If we look at the 1-hour chart of BTC, we can see that there is a good chance that it will break out of the small range it has been in recently, which coincides with the $26,250 resistance level that Ali has been tracking.
The FOMC Meeting Expectation
Timed to coincide with the FOMC meeting, this breakout might spark fresh market turbulence.
Therefore, Bitcoin and cryptocurrency investors have a lot riding on the outcome of today’s FOMC meeting. Market movement will be determined by the Federal Reserve’s actions and announcements, such as the interest rate decision and the publishing of the dot plot.
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FOMC Meeting impact on Bitcoin and Crypto
Since these events may have an effect on stocks, the dollar index, and, eventually, the value of Bitcoin and other cryptocurrencies, traders and investors will be keeping a careful eye on them.
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