Bitcoin and the broader cryptocurrency market faced a setback on Monday, driven by anticipation of a US Federal Reserve meeting. As investors speculated about the outcome of the meeting, the potential for interest rates to remain higher for longer created uncertainty and led to selling. Bitcoin fell to $61,928, its lowest level in the last week. Here are the details…
Investors are waiting tightly for any changes to the central bank’s interest rate policy or hints about the future. During this waiting period, Bitcoin and other crypto assets were under widespread sales pressure and their values decreased.
The Federal Reserve (Fed) is expected to announce its interest rate decision on May 1, and market analysts estimate the probability of no change in interest rates at 95.6%. However, speculation about the outcome of the meeting caused an intense debate among market participants. While high interest rates are generally considered a negative development for risky assets, including cryptocurrencies, it is a matter of curiosity whether this situation will change.
Additionally, the US is expected to announce the unemployment rate for April on May 3. This data will provide more information about the health of the economy and has the potential to influence future policy decisions by the Federal Reserve. Any significant change in the unemployment rate could prompt Fed policymakers to take a more in-depth assessment of the state of the economic recovery.
Potential Implications for the Crypto Market
The Federal Reserve’s hawkish stance on interest rates could lead to further declines in the crypto market as higher interest could deter investment in risky assets. In this case, investors may turn to more traditional and safe assets, which may increase selling pressure in the crypto market. However, in the opposite case, investors may increase their risk appetite and the demand for crypto assets may revive, thus a recovery in Bitcoin and altcoins may be observed.
Popular crypto analyst Rekt Capital noted that Bitcoin has fallen off the $65,500 resistance and is currently trading in a “no-man’s land” between the resistance and the liquidity pool below, which has led to recoveries in the past. stated. However, it is important to emphasize that past performance does not guarantee future performance.
Another important observation came from Bitcoin Power Law modeler Giovanni Santostasi, who suggested that there is potential for a significant recovery if conditions are right. This model attempts to predict future price trends by analyzing Bitcoin’s key strength indicators.
As a result, the Federal Reserve’s policies could have a significant impact on the crypto market. However, considering the volatile nature of crypto assets and other factors in the market, it can be difficult to make an accurate prediction. Investors should create their strategies and manage risks by taking market conditions and fundamental analysis into account.
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