“The Fed’s rate announcement could potentially unleash a bullish wave for Bitcoin, propelling its price towards the $40,000 milestone and ushering in a new era of digital currency dominance.”
Bitcoin’s price has remained steady around the $34,000 mark, but positive on-chain signals have emerged ahead of the Federal Open Market Committee (FOMC) meeting. The US Federal Reserve is expected to announce another short-term interest rate pause, which could have a long-term impact on Bitcoin prices.
The US economy has faced challenges such as the pandemic, geopolitical tensions, and a supply-chain crisis, leading to a “technical recession” and double-digit inflation. In response, the Fed raised interest rates by 525 basis points over a 16-month period. However, in September, they announced a pause after rates reached a 22-year high.
The FOMC is responsible for setting interest rates, and their announcements have an impact on Bitcoin prices. During periods of high inflation, governments raise interest rates, reducing demand for risk-on assets like cryptocurrencies. This resulted in a significant dip in Bitcoin’s price from $47,000 to $33,500.
On the other hand, when inflation drops, the Fed may maintain a neutral stance or cut rates. This increases money supply and incentivizes investors to put capital into risk assets like Bitcoin. However, Fed chief Jerome Powell has noted that inflation is still too high, indicating that rate cuts may not happen in the near future.
Recent data suggests that corporate entities and high-net-worth investors are anticipating more gains from Bitcoin. Large institutional investors have shown consistent demand since the rate pause was announced, with a significant increase in whale transactions. This indicates increased demand from corporate entities and high-net-worth investors.
Based on historical data trends, if the expected rate pause is officially announced, Bitcoin’s price is likely to rise towards $40,000. The majority of Bitcoin holders are in profitable positions, and the overall sentiment is positive. The Global In/Out of the Money data also supports this prediction, showing that $35,100 is the key resistance level before reaching $40,000.
However, if the price dips below $30,000, the bears may invalidate this prediction. The initial support wall around $33,500 seems strong, with many addresses holding Bitcoin at that price. It is important to conduct your own research and consult with professionals before making any financial decisions.
In summary, the upcoming FOMC meeting and expected rate pause could have a long-term impact on Bitcoin’s price. Positive on-chain signals and increased demand from corporate entities suggest that Bitcoin may see further gains towards $40,000. However, market conditions are subject to change, and it is important to stay informed and make informed decisions.