On the verge of a decisive step by the US Federal Reserve, the price of Bitcoin fluctuates, between the support of $29.000 and the resistance of $30.000. With a possible resumption of rate hikes by the US central bank, crypto market participants remain on high alert, aware that this move could have significant consequences for Bitcoin and altcoins.
At the time of publication, BTC price is quoted at $29.150,00 with no gains in the last 24 hours. S&P 500 Futures started the day trading near 4.589,25, down 0,15% for the day.
Fed Meeting Today:
- The Fed's interest rate decision will be announced: 14 pm ET – 18 pm UTC – 15 pm BRT
- The president of the Fed, Jerome Powell, to speak at the Federal Open Market Committee (FOMC) Press Conference: 14:30 pm ET – 18:30 pm UTC – 15:30 pm BRT
The perspective is that, this Wednesday, there is an increase of 0,25 point percentage of the Federal Reserve rate. Such a measure has been awaited, since signs of new increases were issued during the last meeting in June, when it was decided to keep rates stable. The current scenario suggests that, by the end of 2023, there may be two additional interest rate hikes.
This anticipation is based on recent comments by Jerome Powell, chairman of the Fed, and Governor Christopher Waller. Both pointed to further policy strengthening, suggesting that the June hikes were just a temporary respite.
In an environment full of expectations, the CME Group's Fedwatch tool estimates the probability of a 98,9 basis point increase in July at 25%. However, not everyone on the Fed committee is in agreement, making this week's decision even more unpredictable.
An interest rate hike could have negative impacts on Bitcoin and other risky assets, possibly triggering a drop in the price. BTC price and slowing its recovery towards the $30.000 mark. It is worth mentioning that we are in the middle of the “alternative season” according to the Blockchain index, a drop in prices could nullify recent gains for the main altcoins.
An additional warning comes from Chain of Demand (CoD), platform which uses Artificial Intelligence to predict Bitcoin movements. The CoD suggests that the BTC price may fall after this week's meeting. Its indicator, the Open Interest on Binance Perp Futures for BTC, accurately predicted the movement of BTC price at 10 of the 11 previous FOMC meetings.
T+1 BTC price estimate for the next FOMC meeting: Bearish
Confidence: High (90%)
Thus, the mood is one of caution, with investors keeping an eye on the Federal Reserve's moves, aware that the decision could shake Bitcoin's fragile balance around $ 30.000.
