Scenario 1: “As global adoption of cryptocurrencies continues to surge, both Bitcoin and Ethereum are poised for exponential growth, with Bitcoin expected to reach new all-time highs and Ethereum making significant strides towards becoming the backbone of decentralized finance.”
Scenario 2: “Amidst increasing regulatory scrutiny and market volatility, Bitcoin and Ethereum prices experience a temporary dip, prompting savvy investors to seize the opportunity and accumulate these digital assets at discounted prices, setting the stage for a potential bull run in the near future.”
Bitcoin and Ethereum prices are approaching key psychological levels, $34,400 and $1,800 respectively, in anticipation of the US Federal Reserve’s interest rate decision. The top 10 cryptocurrencies by market capitalization have seen price increases leading up to the Fed’s decision. Traders are predicting a 98.2% probability that the interest rates will remain unchanged.
Bitcoin has had a strong rally throughout October 2023, providing gains for BTC holders. However, the upcoming Fed interest rate decision could have an impact on Bitcoin’s price rally. Altcoins like Ethereum are likely to follow Bitcoin’s lead. The majority of market participants expect interest rates to remain unchanged, with only a small percentage anticipating a rate cut by the US central bank.
There are two possible scenarios for Bitcoin and cryptocurrency prices based on the Fed’s decision. Scenario 1 assumes that the interest rates will remain unchanged, which is highly likely according to the CME Fed Watch Tool. In this case, Bitcoin’s price may experience short-term volatility around the $34,400 level, but a recovery could follow soon after.
Scenario 2 considers the possibility of a rate cut, which is less likely but could lead to a rally in risk assets like Bitcoin and altcoins. A rate cut makes it cheaper to borrow funds and engage in leveraging risk assets, which could increase demand and drive prices higher. However, investors are primarily focused on Fed Chair Jerome Powell’s speech to determine the likelihood of further rate hikes.
Yohay Elam, lead analyst at FXStreet, believes that while another “no change” decision is expected from the Fed, the central bank has left room for another rate hike in 2023. Elam points out that the Fed’s dot plot indicates a target of 5.6% by year-end, suggesting the possibility of another move. Powell’s speech will be closely watched for any indications of future rate hikes.
Both Bitcoin and Ethereum prices are hovering around crucial levels ahead of the Fed’s decision. Bitcoin is above $34,400, while Ethereum is trading above the $1,800 psychological level. The outcome of the interest rate decision could have a significant impact on the future direction of these cryptocurrencies.
In conclusion, the US Federal Reserve’s interest rate decision has generated anticipation and speculation among cryptocurrency traders and investors. The two possible scenarios, unchanged rates or a rate cut, have different implications for Bitcoin and altcoin prices. Market participants will closely monitor the Fed’s decision and Powell’s speech for insights into future rate hikes and their impact on the cryptocurrency market.