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What does the FOMC mean for the second quarter? 80K next? –
Bitcoin price fell sharply to a three-week low of $66,170. Let’s analyze and explore how the Federal Reserve’s upcoming FOMC meeting could impact the Bitcoin market.
Tuesday was a disaster for cryptocurrencies. Bitcoin price plummeted to $66,000 from $70,000, and traders are now holding their breath for Wednesday’s rally CPI inflation report and the move by the Federal Open Market Committee (FOMC).
As inflation falls and economic signals weakensome predict the FOMC will see rate cuts, while others say this cryptocurrency dump was artificial and we will pump like crazy this week.
It is true? Will we go back to $70,000 tomorrow?
Pre-FOMC Damage Assessment: Altcoins Hit Hard Before FOMC
As the FOMC approached, altcoins fell even harder than Bitcoin. Ethereum plummeted below $3,500, while other big names like Solana, Dogecoin, Cardano and Chainlink fell between 6% and 9%.
Data from CoinGlass showed leveraged liquidations of $250 million following last Friday’s $400 million purge.
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So, what are the chances that we will see rate cuts from the Fed? 99Bitcoin analysts believe this is not likely.
Powell has said on numerous occasions that the rate will not decrease until people lose their jobs. The number of jobs is increasing now that everyone is forced to do multiple jobs, which means there will be no rate cuts for you.
Furthermore, one must take into account that US rates are much higher than those of other countries. This leaves the Fed more room to lower rates while maintaining higher rates than Europe and Canada.
There’s a chance the Fed won’t lower rates until something breaks.
Is there hope from the FOMC: could this trigger a strong Q3?
One of the main reasons behind the pullback is investors’ “de-risking” ahead of May’s Consumer Price Index (CPI) report and Federal Reserve meeting, as noted by crypto analysts k33.
“The stage is set for a busy macro Wednesday, with May consumer price index data and the Fed’s interest rate decision poised to move the market,” K33 analysts said.
The only hope is that people were asking for another delay on spot eth ETFs, and the Securities and Exchange Commission suddenly changed its mind.
Although the Fed and the SEC are separate entities, this proves that the betting market has no value.
The markets also thought we would have cuts in May. In the end everything is guessed.
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Conclusion: Is there a bull run on the horizon for the price of Bitcoin?
If bullish momentum returns this week, based on current technical analysis, Bitcoin could be poised for a breakout rally. According to trend-based Fibonacci levels, BTC price could reach $81,873 in a new bull run.
However, the upcoming FOMC meeting remains a double-edged sword for Bitcoin. Given the limited chance of a rate cut due to the strong jobs data, we may continue to struggle for another month.
One final food for thought: The next Fed meeting isn’t until the last week of July, and they won’t meet in August. That might give them an incentive to cut now.
But as we said, in the end it’s all guesswork.
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Disclaimer: Cryptocurrencies are a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all your capital.