The Federal Open Market Committee (FOMC) meeting has been slated to begin on Wednesday, January 31. A lot is riding on the Fed’s decision as there’s a 50-50 chance of it either introducing a rate pause or implementing a rate cut in March. The crypto market is ecstatic since there are almost negligible possibilities of a rate hike, which is indeed pretty bullish for the digital currency domain, especially the Bitcoin (BTC) price.
How Will The FOMC Meeting Impact Bitcoin Price?
While the Fed rate cut or pause is seemingly bullish for the market, several analysts expect a rather volatile performance for the Bitcoin price this week. Moreover, The Masked Investor, a Toronto-based crypto analyst, took to X and noted that the FOMC meeting is a “tossup” and nobody really knows how the market would react thereafter.
However, he expressed optimism for the Bitcoin price in the short term. The analyst wrote, “Bitcoin is looking good as long as it can hold above these EMAs.” Here he is referring to the 50-day EMA of 41,004 and the 200-day EMA of 33,924, according to the chart he presented.
But it’s important to note that the chart is about 2 days old and the EMA values have significantly changed. Whilst, the analyst suggests that if the Bitcoin price remains above the above-mentioned values, an upward trajectory can be expected. On the other hand, Blockchain Backer, a YouTuber who specializes in providing crypto insights, referred to the FOMC rate cut as not a bullish development.
YouTuber Labels Fed Rate Cut As A Bearish Event
In a recent YouTube livestream, Blockchain Backer stated that a Fed rate pause would strategically pull the crypto market up while a rate cut is expected to instill a bearish sentiment. He noted that several analysts and the community have gone crazy over the Fed rate cut news but historical trends suggest a bearish outlook for Bitcoin and other cryptocurrencies.
The content creator referred to the past crypto price actions in connection with Fed rate pauses and suggested that a pause would definitely be better for the Bitcoin price. In addition, he noted that the FOMC meeting results could lead to increased volatility wherein 50% of the crypto market would be in the green while the other half would grapple with a downturn.
The YouTuber shed light on Bitcoin’s 2017 bull run and underscored that it took place during a Fed interest rate hiking cycle. He noted that a cutting cycle is to be “truly scared” of and mentioned that as long as the FOMC meeting concludes that there is no rate cut, everything should be fine.
In addition, he noted that the market will settle by Friday once the decision comes in and he expects the Bitcoin price to near the 702 Fibonacci retracement level. Moreover, he suggested that the BTC price would move near $46,000. However, Blockchain Backers warned against a potential correction and massive liquidation after that.
He noted that the BTC price could propel straight to the 702 retracement level before slumping back. The analyst added that this volatility is expected due to the forthcoming Fed decision. He expressed concerns about Bitcoin experiencing a rapid swing from a new daily low to a 702 retracement, eventually ending in a pullback.
Also Read: FOMC Meeting 2024 Date: What To Expect And Its Impact On Crypto Market
Bitcoin Gains Ahead Of FOMC Meeting
As the FOMC meeting is inching closer, Bitcoin has registered a massive rebound. The BTC price surged past $43,000, recovering a major chunk of losses it faced due to the recent declines. At press time, the Bitcoin price gained 2.71% to $43,366.28 on Tuesday, January 30, 2024.
Whilst, the crypto boasted a market cap of $850.70 billion, up by 2.71%. In addition, the trading volume for BTC soared 48.57% to $22.56 billion in the last 24 hours. Moreover, the Bitcoin price attained a high of $43,750.43 during the day, indicating a potential surge nearing $44,000.
Earlier, the BTC value was dumped lower than $39,000 as bears took over the market with major sell-offs. However, the impending FOMC meeting and the possibility of a rate cut or pause are expected to have pushed the prices up. Furthermore, the Spot Bitcoin ETF outflows shrank as Grayscale’s GBTC outflows decreased significantly, which was another positive push for the Bitcoin price.
Also Read: BTC Price: Fed’s Rate Cuts Likely In March Before Bitcoin Halving, Will BTC Price Rally?