FOMC Meet: Bitcoin (BTC), Ethereum (ETH) In Correction Mode?
U.S. stock futures were trading in the red on Tuesday in an apparent anticipation of the Fed’s rate hike decision. As against the bullish flow the crypto market showed this month, Bitcoin (BTC) and Ethereum (ETH) are currently going through the correction phase. However, following the interest rate decision and the subsequent press conference by Jerome Powell, there could be a narrative shift n trader sentiment. Hence, any price drop before and after the announcement may not sustain, as was seen after previous Federal Open Market Committee (FOMC) meetings.
How Markets Will React To Hawkish Statement
Despite a hawkish statement on the state of the U.S. economy by Powell in July 2022, the markets responded in a bullish manner. In subsequent Fed meetings, the investors appeared to have gotten used to the rate hike phenomenon and the markets responded mildly. Similarly, the crypto market could respond either ways in reaction to the economic outlook and future plan of action from the central bank. However, there could be room for reversal in trend, considering the strong bullish momentum cryptocurrencies saw since January 1, 2023.
Meanwhile, the US Dollar Index (DXY) is on an upward curve with a slight rise of 0.18%. Although this is negative for crypto prices, there could be scope for recovery post Powell’s statement.
$DXY showing signs of life for the first time this year just before the FOMC meeting. A further push means correction in both stock and crypto markets, a decline will let #BTC fly higher! pic.twitter.com/VCAeIIXPev
— Sarah Parker ®️ ( Beware Scammers ) (@sarahparker345) January 31, 2023
While the stocks turned red on Monday ahead of the central bank meeting, the crypto market lost its gains from earlier in the week. Both BTC and ETH lost nearly 1.50% in value in the last 24 hours. As of writing, BTC price stands at $22,855, down 1.56% in the last 24 hours, according to CoinGape price tracker. Whereas ETH price stands at $1571, down 0.85% in the last 24 hours. In this context, the crypto market is poised to move either ways in the current scenario in anticipation of a 25 bps rate hike. The CME Fed watch tool suggests that the traders almost certain of a 0.25% rate hike with a 98.1% target rate probabilities.
Also Read: India Bullish On Crypto Regulation With Latest Economic Survey?