As a seasoned crypto investor with over a decade of experience navigating market turbulence, I can confidently say that the upcoming Fed interest rate decision and FOMC meeting on July 31, 2024, promises to bring heightened volatility to the crypto markets.
As a crypto investor, I’ve noticed that the price of Bitcoin has dipped by 5.20% from its level on July 29, currently hovering around $66,400. The upcoming decision on interest rates by the US Federal Reserve (FED) and the FOMC meeting scheduled for Wednesday could potentially bring increased volatility to the crypto markets. So, I’m bracing myself for some potential price swings in the coming days.
On July 31, 2024, at 6:00 PM Greenwich Mean Time, we’ll learn about the Interest Rate decision. Afterward, the Federal Open Market Committee (FOMC) will convene for a two-day gathering.
Read more: BTC Whale Bags $388M BTC Ahead US Fed Rate Decision
Fed Interest Rates & FOMC Outlook
According to the FedWatch Tool, it’s highly likely that the Federal Reserve will keep the current interest rate range unchanged at around 5.25% to 5.50%. This prediction is made considering both positive signals in inflation and signs of a slowing labor market. The financial market anticipates an approximately 85.8% likelihood of a minor rate adjustment (quarter-point or 25 basis points) in September, with a slightly lower probability of a more substantial cut by half a point (13.9%).
The way the Federal Open Market Committee (FOMC) phrases its statement following their meeting will significantly influence how both conventional and cryptocurrency markets respond. Given that the Fed typically prefers to gather more data before making decisions, it’s expected they won’t alter their current approach of being patient.
According to the FedWatch Tool, it appears that financial markets are predicting a consistent 0.25% reduction in interest rates each month, with the first adjustment scheduled for September. If the Federal Reserve decides to modify or counteract this expectation, there could be increased volatility throughout various market sectors as a result.
Furthermore, the publication of the Consumer Price Index (CPI) figures is scheduled for mid-August, which may likewise influence financial markets, potentially affecting Bitcoin’s price as well.
As a crypto investor, I’ve been keeping a close eye on the Federal Reserve’s latest economic forecasts for 2024. Contrary to my initial expectations, it seems they are planning fewer rate cuts compared to earlier projections. Yet, it’s important to note that the Fed is expected to maintain a cautious yet balanced stance in their monetary policy decisions. This strategy aims to prevent premature easing while effectively addressing inflation concerns.
As a crypto investor, I’m keeping a close eye on the recent Fed decision, understanding that it won’t likely bring immediate changes. However, the insightful comments from the Fed in the near future will significantly influence my outlook and investment strategies for the upcoming months.
How Bitcoin Price Reacts To FOMC
Bitcoin price reacts to the Interest Rate decision or FOMC in two ways:
- An immediate spike in volatility governed by how far the actual data deviated from the market expectations.
A steady long-term effect that is also dependent on BTC’s technical aspects.
In the graph you see, specific Federal Open Market Committee (FOMC) and Consumer Price Index (CPI) occurrences are associated with market low points in some cases, while high points in others. Now let’s discuss what might happen to Bitcoin’s price following today’s Interest Rate decision and FOMC announcement.
After the interest rate decision and FOMC meeting, a temporary increase in Bitcoin’s volatility might drive its price up to $67,600. However, this surge could be short-lived, lasting only a day or two. From August 1st to 14th, Bitcoin’s projected price movement indicates that it may continue rising and potentially reach $70,000 or even its all-time high again. This is due to the accumulated sell orders above the support levels formed since mid-March 2024.
If history follows a similar pattern, the announcement of the Consumer Price Index (CPI) on August 14 might signal a peak in Bitcoin’s price locally.
If this situation arises, it’s likely that Bitcoin might adjust around the crucial support level of $63,047. A breach of this level could lead Bitcoin back towards the daily order block at approximately $58,232, which may offer a suitable opportunity for long-term investors to purchase at lower prices.
If Bitcoin’s peak price of $73,805 on the weekly chart transforms into a solid base of support, this would indicate strong buying interest. This could lead to Bitcoin stabilizing for a while before potentially rising again towards $80,000.
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2024-07-31 18:58