How Will FOMC Meeting Affect Cryptocurrency Market?
Bitcoin’s (BTC) price dropped rapidly over the last few days, but just ahead of the FOMC meeting, the token is starting to recover.
Bitcoin had enjoyed a bull run for weeks that helped it achieve a new record high, but then it dropped shortly after passing $73,000. As the FOMC meeting approaches, scheduled for later today, the BTC price has climbed slightly. After dropping as low as $61,387 (BTC/USD), the coin is now up to $64,074 and climbing.
Could we see a recovery for Bitcoin when the Federal Reserve meeting is done? If Bitcoin manages to recover, that will help the rest of the crypto market, most of which has been down over the last few days. Bitcoin’s drastic price drop has had a serious effect on the rest of the market, causing Ethereum (ETH), Solana (SOL), Dogecoin (DOGE), Cardano (ADA), and others to plummet as well. Many of these major crypto coins have experienced drops on par with that of Bitcoin over the last few days.
Bitcoin’s price drop came directly after inflation numbers were released that were higher than expected. It makes sense to think that the upcoming FOMC meeting and the comments on inflation to be made there will directly impact Bitcoin and the crypto market again.
FOMC Expectations
The big news out of the FOMC meeting will be whether interest rates will be cut or not and when those cuts might happen. It is expected that there will be no cuts announced yet and that cuts may happen in June at the earliest. That is because the inflation rate is still high, above 3%, and the Federal Reserve has expressed concern about seeing marked progress toward 2% before they announce interest rate cuts.
As long as inflation remains high, interest rates will not be cut. The FOMC meeting may reiterate inflation worries and bring them back to the forefront, making it tough for Bitcoin and other cryptos to recover.
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