tl;dr
Bitcoin price has experienced a 5.20% decline since July 29, currently trading around $66,400. The upcoming US Federal Reserve's (FED) interest rate decision and Federal Open Market Committee (FOMC) meeting on Wednesday are expected to increase volatility in the crypto markets. The FedWatch Tool ind...
Bitcoin price has crashed 5.20% since July 29 and trades at around $66,400.
FED INTEREST RATES & FOMC OUTLOOK: Fed likely to maintain current interest rate range; market expects steady rate cuts starting September
Impact of FOMC on Bitcoin price: Short-term volatility spike expected, followed by potential climb to $70,000 and correction to $63,047 support level
Bitcoin price forecast: Possibility of revisiting all-time high levels, with potential correction to $58,232 support level
Bitcoin price has experienced a 5.20% decline since July 29, currently trading around $66,400. The upcoming US Federal Reserve's (FED) interest rate decision and Federal Open Market Committee (FOMC) meeting on Wednesday are expected to increase volatility in the crypto markets.
The FedWatch Tool indicates a 96.9% chance of the Fed maintaining the current interest rate range of 5.25% to 5.50%. Market expectations include an 85.8% probability of a quarter-point rate cut in September. The Fed's post-meeting statement will be crucial for its impact on traditional and crypto markets.
The Consumer Price Index (CPI) data release in mid-August and the Fed's updated economic projections are also anticipated to influence the markets, including Bitcoin price. The Fed is expected to adopt a balanced approach to address inflation concerns.
Bitcoin price typically reacts to the FOMC in two ways: immediate volatility changes and longer-term effects based on technical aspects. Following the interest rate decision and FOMC meeting, Bitcoin price may briefly rise to $67,600 but could subsequently revert.
Bitcoin price forecasts suggest a climb to revisit $70,000 or all-time high levels between August 1 and 14, with a potential correction to the $63,047 support level following the CPI announcement on August 14. A breakdown below this level could lead to a revisit of the daily order block at $58,232.
Bitcoin price has crashed 5.20% since July 29 and trades around $66,400. With the upcoming US Federal Reserve’s (FED) interest rate decision and Federal Open Market Committee (FOMC) scheduled for Wednesday, investors can expect heightened volatility in crypto markets. The Interest Rate decision is scheduled for Wednesday, July 31, 2024, at 18:00 GMT. Following this, the FOMC will hold a two-day meeting.
Based on the FedWatch Tool, there is a 96.9% chance that the Fed will maintain the current interest rate range of 5.25% to 5.50%. This decision comes amid mixed economic signals, including improving inflation and a cooling labor market. The market expects an 85.8% probability of a quarter-point (25 basis point) rate cut in September, with a 13.9% chance of a half-point cut. The wording of the FOMC’s post-meeting statement will be crucial to determining its effects on the traditional or crypto markets. The Fed is unlikely to change its stance of waiting for data to make decisions.
Based on the FedWatch Tool, the market expects a steady 25 basis point rate cut every month, starting September. The Fed could temper this expectation, leading to a spike in volatility across markets. Additionally, the Consumer Price Index (CPI) data is set to be released in mid-August and could also impact the markets, including Bitcoin price.
Bitcoin price reacts to the Interest Rate decision or FOMC in two ways: 1. An immediate spike in volatility governed by how far the actual data deviated from the market expectations. 2. A steady long-term effect that is also dependent on BTC’s technical aspects.
A short-term volatility spike following the interest rate decision and FOMC meeting could push Bitcoin price to $67,600, which could eventually be undone over the next day or two. Between August 1 and 14, Bitcoin price forecast suggests BTC could continue to climb higher and revisit $70,000 or all-time high levels to collect the sell-side liquidity formed above the lower highs formed since mid-March 2024.
However, if history repeats, the CPI announcement on August 14, BTC could lead to local top formation for BTC. In such a case, investors can expect BTC to correct the $63,047 key support level. A breakdown of this level could send the pioneer crypto down to revisit the daily order block at $58,232, which would be an ideal place for long-term investors to buy the dips.
On the other hand, if Bitcoin price flips