How Will the FOMC Meeting Affect BTC?
The Federal Open Market Committee (FOMC) meeting is scheduled to begin on Wednesday, January 31. A lot depends on the Fed’s decision because there is a 50-50 chance that the Fed will pause or cut interest rates in March. The crypto market is ecstatic because there is an almost negligible possibility of a rate hike, which is actually quite bullish for the digital currency space, especially the Bitcoin (BTC) price.
How Will the FOMC Meeting Affect Bitcoin Price?
While the Fed’s rate cut or pause appears to be a bullish sign for the market, many analysts are expecting a highly volatile performance for the Bitcoin price this week. Moreover, Toronto-based crypto analyst The Masked Investor took to
However, he expressed optimism regarding the Bitcoin price in the short term. “Bitcoin looks good as long as it can hold above these EMAs,” the analyst wrote. According to the chart he presents here, he is talking about the 50-day EMA at 41,004 and the 200-day EMA at 33,924.
However, it is worth noting that the chart is approximately 2 days old and the EMA values have changed significantly. The analyst suggests that an upward trend can be expected if the Bitcoin price remains above the above-mentioned values. On the other hand, Blockchain Backer, a YouTuber who specializes in providing crypto analysis, stated that the FOMC interest rate cut is not a bullish development.
YouTuber Labeled Fed Rate Cut as a Fall Event
In a recent YouTube livestream, Blockchain Backer stated that the Fed interest rate pause will strategically push the crypto market higher, while the rate cut is expected to create a bearish trend. He noted that several analysts and communities went crazy over the news of the Fed’s interest rate cut, but historical trends are bearish for Bitcoin and other cryptocurrencies.
The content creator touched on past crypto price movements in conjunction with Fed rate pauses and suggested that a pause would definitely be better for the Bitcoin price. Additionally, he noted that the results of the FOMC meeting could lead to increased volatility, with 50% of the crypto market likely to be in the green, while the other half will struggle with decline.
The YouTuber shed light on Bitcoin’s bull run in 2017, underlining that it occurred during the Fed’s interest rate hike cycle. He stated that a rate-cutting cycle “should really be feared” and stated that as long as the FOMC meeting concludes there is no rate cut, all should be well.
He also stated that after the decision comes, he expects the market to calm down by Friday and the Bitcoin price to be close to the 702 Fibonacci retracement level. He also suggested that BTC price will approach $46,000. However, Blockchain Supporters warned of a possible correction and massive liquidation from now on.
He noted that BTC price could move directly towards the 702 retracement level before falling back. The analyst added that this volatility was expected due to the upcoming Fed decision. He expressed concerns about Bitcoin making a rapid transition from a new daily low to a 702 retracement, eventually resulting in a pullback.
Also Read: FOMC Meeting 2024 Date: What to Expect and Its Impact on the Crypto Market
Bitcoin Shows Gains Ahead of FOMC Meeting
Bitcoin made a big recovery as the FOMC meeting approached. BTC price climbed above $43,000 and recouped most of the losses it faced due to recent declines. At the time of writing, the Bitcoin price increased by 2.71% to $43,366.28 on Tuesday, January 30, 2024.
The market value of the cryptocurrency increased by 2.71%, reaching $850.70 billion. Additionally, BTC’s trading volume increased by 48.57% to $22.56 billion in the last 24 hours. Additionally, Bitcoin price reached $43,750.43 during the day, indicating a potential rally approaching $44,000.
Previously, BTC value had fallen below $39,000 as bears took over the market with massive sell-offs. However, the upcoming FOMC meeting and the possibility of a rate cut or pause are expected to push prices higher. Additionally, with Grayscale’s GBTC outflows decreasing significantly, Spot Bitcoin ETF outflows have also decreased, another positive driver for Bitcoin price.
Also Read: BTC Price: Fed Rate Cut Likely Before Bitcoin Halving in March, Will BTC Price Rise?
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