Anticipation of renewed rate cuts has historically boosted Bitcoin, leading to a minor push and a lift in overall market sentiment. However, the recent upswing has made BTC bulls more passive, particularly in light of the upcoming FOMC meeting today and tomorrow. With expectations of varying rate cuts in the coming months, there is speculation about whether Bitcoin and the overall crypto market will enter a period of narrow consolidation.
It goes without saying that the prevailing sentiment in the market is one of fear and anxiety. Read on for more information and clarity.
FOMC 2024: Key Predictions
The U.S. Federal Reserve’s FOMC meeting on Jan 30-31, where they discuss monetary policy, marks a crucial factor for the crypto market. Investors are keenly watching Fed Chair Jerome Powell’s speech for insights.
In December 2023, the Federal Reserve kept interest rates steady at 5.25%-5.5%, but 2024 might bring changes. There’s speculation about three potential rate cuts of 75-100 basis points. Big players like JPMorgan, BlackRock, Morgan Stanley, and Bank of America have different views, with BlackRock leaning towards cuts in June and others eyeing the third quarter of 2024.
Read More: Will the Fed Reserve Lower Interest Rates in February? Here’s What We Know
Morgan Stanley’s Andrew Slimmon suggested Powell may lower rates “patiently”. The Fed can evaluate inflation trends before making judgments due to the U.S. economy’s strength.
CME FedWatch Tool’s Insight
Conversely, the CME FedWatch Tool suggests a 98% probability of steady interest rates in the upcoming meeting. Powell’s speech and the Treasury refunding announcement on Jan 31 will impact crypto prices, especially Bitcoin.
How Has the BTC Price Reacted Historically?
Bitcoin has typically responded positively to rising FED rates, signaling inflation. However, the FED’s claim of economic resilience has kept rates softer, potentially prolonging the current consolidation period for both markets and Bitcoin prices.
Amidst the uncertainty, Markus Thielen, CEO of 10x Research, advises a strategic Bitcoin purchase above $43,000. He predicts a rally, envisioning Bitcoin returning to the $50,000 mark by the end of the quarter, citing a promising wave 5 in the market.
Also Read: The First FOMC Meeting of 2024: What to Expect and Its Impact on Bitcoin Price
We’re waiting for answers
As the crypto community looks ahead to the FED meeting, there’s a common belief that rate cuts might be put on hold in the immediate future, with March seen as a possible time for adjustments. The big question remains: What’s next for Bitcoin post-FOMC meeting? One thing is certain—the crypto world is on the brink of change and it’s going to be exciting.