Why Bitcoin Price Could Bounce After Today’s FOMC Meeting
21 Setembro 2022 - 01:42PM
NEWSBTC
The Bitcoin price has been moving sideways over the past few days
bound solely to macroeconomic factors. The benchmark cryptocurrency
was rejected north of $20,000 after “The Merge” and seems poised to
face volatility over today’s trading session. Related Reading: Reef
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At the time of writing, Bitcoin (BTC) trades at $19,200 with
sideways movement in the last 24 hours and a 5% loss over the past
week. As the market moves past “The Merge”, crypto has returned to
its correlation with global markets and the most important factors
driving the price action: inflation and interest rates. What To
Expect For The Bitcoin Price Ahead Of The FOMC Meeting? Later today
the U.S. Federal Reserve (Fed) will hold its Federal Open Market
Committee (FOMC) meeting where it will announce its upcoming
interest rate hike. As it has happened in the past month, the
crypto market is poised to see an uptick in volatility ahead of
this major event. Market participants seem to be expecting another
75 basis points increase after the latest Consumer Price Index
(CPI) print and the Non-Farm Payrolls (NFP) metrics. The results of
these reports hinted at persistent core inflation in the U.S.
dollar, according to trading desk QCP Capital. The firm believes
that the market will be looking at today’s interest rate hikes, the
Fed’s plan for the future of its monetary policy, and its reaction
to inflation. In that sense, today’s FOMC will be critical for
market participants to have a deeper insight into the Fed’s
strategy. The trading desk wrote: (…) we believe the focus will be
on the Dot plot. Markets will look for clear guidance on the
expected number of hikes for the last 3 FOMC meetings of 2022, as
well as the updated terminal rate FOMC members are forecasting for
next year. Without “The Merge” acting as a bullish catalyzer, and
with Ethereum trading under a “sell the news” setup, the Bitcoin
price and crypto market have flipped to extreme fear levels. This
sentiment seems to be the norm across all financial sectors. As
seen below, even Gold is displaying a high correlation with risk-on
assets, QCP Capital stated. The precious metal has underperformed
in circumstances where Gold should be rallying, with high
inflation, and a major arm conflict in Europe (Russia invading
Ukraine). Bitcoin Price Set For A Relief Rally? Finally, QCP
Capital believes the Bitcoin price and the crypto market could see
some relief. If the Fed stays within market expectations,
announcing a 75-bps interest rate hike, cryptocurrencies and other
risks on assets could react to the upside. Related Reading: U.S.
House Legislation Looks To Place Two-Year Ban On UST-Like
Stablecoins As trading firm noted, every FOMC meeting in 2022 has
led to a crypto relief rally, this time seems poised to move in
tandem with historical data. QCP Capital added: How long this rally
lasts is another question though. Will it just be a single day
short squeeze like in May and June? Or can we finally sustain some
positive momentum into Q4 and the next CPI pivot in 3 weeks.
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