Bitcoin’s Fate in the Balance: A Close Look at the January FOMC Meeting

The post Bitcoin’s Fate in the Balance: A Close Look at the January FOMC Meeting appeared first on Coinpedia Fintech News

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.

FOMC 2024: Here’s what you need to know!

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. 

Notably, the Federal Reserve (Fed) maintained a steady interest rate of 5.25%-5.5% in December 2023. However, they may make three rate cuts of 75-100 bps in 2024. On the contrary, Wall Street analysts like JPMorgan, BlackRock, Morgan Stanley, and Bank of America said there will be no Fed rate cuts in January and March. BlackRock predicts rate cuts in June due to the US economy’s resiliency, while others anticipate them in the 2024 third quarter.

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.

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. 

Will the BTC price be refrained from marking above $43,000 this month?

It has been observed before that the BTC price has reacted positively to a rise in FED rates, as it indicates a rise in inflation. The FED claims to have withstood the economic turmoil and, hence, has been softer on rates last year. The fresh rates today are expected to remain unchanged, which may not induce the required volatility, which may eventually assist the markets & Bitcoin price to trade within the same consolidation for some more time.

Meanwhile, Markus Thielen, CEO of 10x Research, suggests buying Bitcoin above $43,000, predicting a forthcoming rally. He visions Bitcoin reclaiming the $50,000 level by the end of the quarter, citing the beginning of wave 5 in the market. 

Currently, the market largely believes that the FED could hold back with the rate cuts but have more chances for cuts in March. What do you think?