As the crypto community eagerly anticipates the outcome of the upcoming Federal Open Market Committee (FOMC) meeting, many believe that the words of Fed Chairman Jerome Powell could make or break the current crypto rally. Despite a track record of mishandling inflation and implementing aggressive interest rate changes, Powell and the FOMC are still viewed as a central authority in the financial markets, effectively serving as market-makers and influencers.
In tomorrow’s meeting, the possibility of another interest rate hike by 25 basis points is on the table. However, due to the precarious condition of some banks, it remains uncertain whether this increase will come into effect. Investment strategist Angelo Kourkafas considers the 25 basis points to be likely but foresees a pause after this adjustment. Although the statement could point toward continuous tightening, Kourkafas believes the May hike could very well be the last.
The impact of these interest rate changes on the crypto market, and Bitcoin in particular, is difficult to predict. A 0.25% interest rate increase is generally viewed as unfavorable for cryptocurrencies, and Bitcoin is still grappling with the strong resistance at the $30,000 level. The crypto has been met with multiple rejections at this price point, signaling a weaker market position.
Despite struggling to break the resistance, Bitcoin’s price remains steady between $27,000 and $28,000. In true market fashion, Bitcoin could potentially take everyone by surprise and soar through the resistance when most expect a retracement. However, based on current trends, it seems more plausible that the crypto’s value will drop, potentially down to the support level at $25,000. If this occurs, altcoins are likely to face significant losses in the aftermath.
Regardless of the FOMC meeting outcome, the impact on the crypto markets should not be underestimated. Investors must carefully weigh the potential risks and rewards in the face of uncertain rate decisions and their impact on the cryptocurrency space. However, it is important to note that this information is purely speculative and should not be construed as legal, tax, investment, financial, or other advice.
Source: CryptoDaily
