Bitcoin is fighting to hold above $63,000 after momentarily falling below $61K this morning, just hours before the FOMC meeting.
Yesterday saw Bitcoin fall by 8%, the biggest one-day decline since the collapse of FTX, which has made traders extremely wary.
The world’s biggest and most established cryptocurrency fell to $60,951.91 on Wednesday morning before rising again. At the time of writing, Bitcoin is priced at $63,154.69. This indicates that, based on CoinGecko data, it is 1.6% lower than yesterday and 14% lower than last week.
What has Federal Reserve Chairman Jerome Powell announced?
There will be another press conference by the US Federal Open Markets Committee later today, which is both good and terrible news. Jerome Powell, the chair of the Federal Reserve, will discuss the committee’s economic forecast and declare if interest rates will be changed during the conference.
FOMC meetings occasionally cause market volatility in cryptocurrencies. Over the past year, investors have been expecting the Fed to follow through on its prediction of cutting the benchmark rate by three-quarters of a point to 4.6% by the end of 2024.
What do investors predict about Federal Reserve interest rates?
According to the CME FedWatch tool, 99% of investors do not believe the Fed will make any announcement regarding a rate decrease today. Seventy-four percent of investors believe that the current rate, which is in the range of 525 to 550 basis points, will remain the same until the May meeting. However, 60% of investors believe that the FOMC will likely start cutting federal interest rates in June.
Investors expect interest rates to remain unchanged after this March meeting. However, this is still to be determined. In general, cryptocurrency investors consider rates falling or even remaining the same as positive.
Will the Federal Reserve keep interest rates unchanged?
The price of Bitcoin (BTC) has historically been tied to risky assets and central bank policies. The more favorable credit conditions exist in the economy, the greater the potential for BTC to rise. When interest rates are low, investors are more willing to invest in riskier assets. Investors retreat to dollars during periods of high interest rates.
