Bitcoin

A positive outcome for the crypto market at the upcoming Federal Open Market Committee (FOMC) meeting seems plausible due to the ongoing banking crisis and macroeconomic concerns in the United States. The FOMC is set to convene on March 21st and 22nd, 2023, to determine the best course of action to achieve the central bank&#39;s long-term goal of reducing inflation to its 2% target rate. However, the recent collapse of Silicon Valley Bank and others poses an immediate challenge in the form of a <a href="https://blockchainmedia.id/likuiditas-dolar-membengkak-harga-btc-us-28-ribu-bikin-mata-membelalak/" rel="noopener noreferrer nofollow">banking crisis</a>.Additionally, in February 2023, the CPI rose by 0.4%, and it increased by 6% year-over-year. Investor fears of a domino effect have led to a 27.62 percent decline in the KBW Nasdaq Bank Index over the past two weeks.The outcome of the FOMC meeting is expected to address the dual issues of curbing inflation and preventing a financial crisis with potential ripple effects throughout the economy.According to the CME FedWatch Tool, which forecasts the Federal target rate for the upcoming FOMC meeting, there is a 63% likelihood of a 25 basis points (bps) increase. In this situation, experts believe that a 25 bps rate hike, accompanied by a dovish Fed stance, could potentially trigger a Bitcoin price rally above the $30,000 mark. Furthermore, analysts have not entirely dismissed the possibility of a surge occurring next week.However, the price of the cryptocurrency may experience a decline before the FOMC meeting, as this has been the historical trend leading up to previous FOMC meetings.<h2 id="header-0">The Factors</h2>Numerous potential factors could explain the recent success of cryptocurrencies in the past two weeks. One possibility is the panic engulfing global banks, which highlights Bitcoin&#39;s founding principles of financial decentralization. A more plausible explanation is the impact of rising interest rates over the past year on banks—unintentionally affecting both Bitcoin and stocks—causing a shift in expectations for U.S. monetary policy.Market participants no longer anticipate the Fed taking an aggressive stance on interest rates in its next decision on Wednesday. Both the possibility of the central bank maintaining current rates or raising them by a quarter of a percentage point signal a more accommodative policy. Signs that rate hikes may slow down or even reverse later this year would significantly benefit Bitcoin prices, as lower rates encourage demand for higher-risk assets like cryptocurrencies.However, as Alex Thorn, Head of Research at the crypto-focused financial services group Galaxy Digital, noted, &#34;while further gains will be influenced by macro conditions … an analysis of performance, on-chain, and supply-side data presents reasons for sustained optimism among <a href="https://invesmedia.id/apakah-bitcoin-layak-disebut-sebagai-aset-safe-haven-atau-emas-digital/" rel="noopener noreferrer nofollow">Bitcoin bulls</a>.&#34;Although Bitcoin is expected to move in tandem with the Dow Jones Industrial Average and S&amp;P 500 on Wednesday following the Fed&#39;s decision, there are indications that cryptocurrencies are gaining strength at a fundamental level, beyond their sensitivity to macro factors.Despite trends suggesting maturation and resilience across cryptocurrencies, market movements this week are likely to be primarily driven by the Fed&#39;s decision and the future outlook for interest rates. []

Focus Turns to Forthcoming FOMC Meeting as Bitcoin Rally Anticipated

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Інші статті, опубліковані 22 бер. 2023 р.

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