Bitcoin Reverses after FOMC Meeting

While Bitcoin (BTC) was going bullish yesterday and had gained nearly 5%, it reversed course after the FOMC meeting took place and the Federal Reserve reiterated elevated inflation.

Bitcoin is down just 0.03% today, having lost most but not all of its Wednesday gains. At $67,843 (BTC/USD), the crypto token has a difficult road ahead to hit a new record high. It seems like every time Bitcoin starts to make progress, something causes it to stop short and pull back.

Inflation has been a constant thorn in Bitcoin’s side for much of the second quarter of 2024. The FOMC meeting has confirmed that inflation is high, though it is diminishing slightly. However, it Is not enough for the Federal Reserve to call for interest rate cuts right now. In fact, Chairman Jerome Powell said that there would just be one rate cut, which should happen in September.

Previously, economic analysts expected a rate cut in July, but that does not look likely any longer. The Federal Reserve has repeatedly said this year that they are waiting to see inflation make further progress toward their goal of a 2% inflation rate before they issue any rate cuts.

More Bad News for Bitcoin

Chairman Powell also commented on the recent jobs data, saying that the numbers might have been overestimated and that the positive change reported there is probably not as significant as previously thought.

Powell commented on the negative consumer sentiment about the economy, which he says he does not understand. He believes that the public should be more positive about the US economy and the progress that has been made since the covid-induced recession.

These comments may have had the opposite of their intended effect, and the crypto market is definitely showing some trepidation as investors process the new FOMC statement. A market that was certainly bullish yesterday is now reserved and pulled back today, meaning that it may miss some of the record-breaking targets that were recently put out there by analysts, like an imminent record high for Bitcoin and a $4,000 level for Ethereum in the near future.