"The decision may come as a surprise." What awaits Bitcoin after the Fed meeting
Interviewed analysts talked about the impact of changes in the U.S. Federal Reserve interest rate on the Bitcoin rate
Cryptocurrency market participants are waiting for the decision of the U.S. Federal Reserve (Fed) and its consequences for the price of crypto assets. As of 12:00, bitcoin is trading at $28,600, and the market capitalization of the first cryptocurrency is $554.9 billion. Interviewed analysts told how the price may behave after the Fed meeting. The Fed's decision will be announced at 9 p.m.
"We should expect a correction."
Head of Research at AMarkets
Many analysts expect today's meeting of the U.S. Federal Reserve to be marked by another increase in the federal funds rate. I tend to agree with them. We should expect an increase in the index to about 5-5.25%. Such a decision is already largely incorporated into the quotations. In addition, at the end of the week in the U.S. the unemployment report for April is to be released. The labor market is still strong, but negative trends are already putting the USA close to the prospect of economic cooling. In other words, in the near term, we should expect the end of the cycle of rising dollar rates.
Bitcoin is a high-risk asset and therefore always reacts to changes in the Fed key rate. When the rate goes up, bitcoin goes down. Because in times of economic recession or crisis, personal and corporate lending rates rise and investments lose yields. So investors tend to invest in conservative instruments like government bonds.
But when the economy is booming and the Fed's benchmark rate drops, bitcoin begins to rise sharply. As the investment climate improves and investors seek to diversify portfolios with high-risk assets.
Right now, bitcoin is holding steady at $28,500. Over the past ten years, bitcoin has only fallen four times in May, and not very noticeably. In light of the Fed's decision, the difficulties in the job market, and the apparent crisis in the U.S. banking system, I would say that we should expect a correction down to the $25,000 to $26,000 level.
"Volatility both ways."
CEO of Cryptorg trading platform
I believe that there will be no surprises. The interest rate will rise by 25 basis points, according to forecasts. Much more interesting will be what they will say afterward at the Fed meeting about the following plans concerning the interest rate.
I expect Bitcoin to rise to at least $29,200 today and increased volatility in both directions on the evening news.
"There is no reason for a market collapse."
BitRiver financial analyst Vladislav Antonov
Global financial markets are on the verge of a nervous breakdown in anticipation of the Fed meeting scheduled for May 3. Investors are worried about the apparent interest rate hike to 5-5.25%, which could lead to a major disruption of the global economy and possibly even a recession. While the probability of a hike has already risen above 90%, many in the investor community believe that the actual decision may always be more unexpected than market forecasts.
The main focus of investors is on US Federal Reserve Chairman Jerome Powell, who is scheduled to unveil plans for further monetary policy (MP) tightening during a press conference on May 5. These decisions will be important not only for the global economy but also for the crypto market in particular.
Bitcoin continues to consolidate above $26,500, and despite the possibility of volatility in the coming days, the positive movement will continue after June 1. This support has long been attracting the attention of sellers, who may open a hunt for stops on long positions placed under it. There is no reason for the market to collapse. I'm sure in the attempt to consolidate above $31 th.
But, as always, we can expect some unpredictable factors, which can suddenly change all the quotations in the world market. Therefore, investors should be wary and ready for unexpected changes, which, as you know, can just happen in an instant. Some may find themselves on the winning side, while others may find an unpleasant surprise in the form of an unexpected market crash. The next few days will show who ends up on what pole.