FOMC: Will the Fed re -launch the crypto market or will it crash its fall?

The Kryptos market is again in the middle of uncertainty, suspended from a single question: what will be the next decision of the American federal reserves? While bitcoins oscillates below $ 85,000 and the fear and greed index will collapse at 23 years, investors hold their breath away. Meeting the Federal Committee on the Open Market (FOMC) ends today and all attention turns to Jerome Powell.

Pressure markets before the Fed verdict

Bitcoins and the main cryptus have experienced increased volatility, which testified to increasing nervousness.

This morning, Bitcoin fell below $ 83,000 before jumping slightly to $ 83,450, while Ethereum, Solana and XRP alternate between low increases and decreases. Ryan Lee, the main analyst of Bitget Research, emphasizes this dynamics and determines that:

Bitcoin dropped by 0.2 %to determine around $ 83,000, a wider withdrawal from the crypto market, while Solana, XRP and Dogecoin are also experiencing a decline, while gold exceeds $ 3,000 on an ounce and markets are waiting for the FomC 1925. Property influenced by the uncertainty around the monetary policy of the Fed, profits and movement towards traditional attacks. The result of the Fomc meeting could either support a jump if the tone is flexible, or emphasize the repair if the position remains restrictive, with short -term bitcoin is now more associated with global economic signals than its role of digital gold.

The central element fears of investors is the position of the federal reserve system at interest rates. Officially, consensus agrees to maintain rates between 4.25 % and 4.5 %, but it is a Powell speech that will dictate an event set.

Here are three possible scenarios concerning investors:

• Maintaining cautious rates and manifestations: the Fed might decide that the markets would not shake, maintain a neutral tone and remembered that the rates would remain high as needed for inflation;
• A monetary relaxation signal: If Powell suggests that rates may have been dropped before expected, this would create an air call for risk assets, including bitcoins;
• Stricter than expected speech: a firm posture that reaffirms the lack of a decrease in rate before mid -2010 could cause capital leakage from the crypto market with significant price correction.

“We are not planning an immediate reduction in the rate,” Fed President said in recent months. It emphasizes increased inflation and still fragile economy.

However, a slight change in his tone would be enough to react on the markets

For now, investors remain on the emergency room and are exploring the smallest index that could point out a change in the ceiling of the Fed.

Crypto market at the intersection

If the Fed maintains a firm and restrictive posture, the market could experience a new withdrawal, because investors would prefer safer investments as obligations.

Many analysts are worried about the tightening of liquidity, which would particularly affect the risk like Bitcoin.

“The financial flows are beginning to move towards the European and Asian markets,” notes the QCP capital report, which proposes to relocate capital from technological values ​​and cryptos.

Conversely, if Powell evokes possible money relaxation before expected, the crypto market could immediately respond with a spectacular bounce.

The recent decrease in consumer price index (ICC) from 3.1 % to 2.8 % could serve as an argument in favor of future flexibility. If the Fed suggests that rates will be reduced before mid -2025, bitcoins and altcoins could benefit directly, which would again attract investors in search of high returns.

Powell’s speech will be conditional on market movements in the coming hours, and the range of reactions could be brutal. The amicable approach would open the way to a new ascending dynamics and strengthen interest in crypts as a refuge face to face a possible economic recovery. On the contrary, a hard and unambiguous line could indicate the beginning of the new correction phase that would test the resistance of the markets in the face of inflexible monetary policy.

Luc Jose A.

A graduate of the Toulouse and the Blockchain Consultant Certification certification holder and I joined the adventure of Cointribuna in 2019. I convinced of the potential of blockchain to transform many economy sectors, committing to raising awareness and informing the general public about how the ecosysty developed. My goal is to allow everyone to better understand blockchain and take the opportunity they offer. I try to provide an objective analysis of messages every day, decrypt trends on the market, hand over the latest technological innovations and introduce the economic and social issues of this revolution.

Renunciation

The words and opinions expressed in this article are involved only by their author and should not be considered investment counseling. Do your own research before any investment decision.