The Cryptocurrency market is currently trading sideways as a few currencies are waving red while others are trading on a green note.
Bitcoin bulls and bears have been combating each other while the FOMC meeting gets ready for today’s meeting, on May 4th. The Bitcoin price has dropped and is hovering around $38,000.
FOMC Impact On Crypto
It’s just not Bitcoin, even altcoins have consolidated on a bearish note and are just waiting for the next bull run. However, investors are carefully watching the upcoming Federal Open Market Committee (FOMC) conference.
The cryptocurrencies have been trading in this bear market for two days as the uncertainty has shadowed the crypto space ahead of the FOMC meeting today.
Jerome Powell, Federal Reserve chairman will declare if there will be any quantitative tightening where the rates will be increased.
Many analysts have different opinions and one such analyst who has tweeted his opinion is
Today’s meeting will give us a clear picture of the upcoming monetary policy measure updates. The Federal Reserve’s announcement in March’s meeting had a declaration that the economy had dropped by 1.4% in Q1, which pointed toward recession.
The economic measures are always taken with the aim to control the recession and a hawkish approach by the FED will attract increased interest. This in turn will pull the crypto market resulting in a downward trend for Bitcoin landing at $30k.
On the contrary, if the FED decides to have a kind approach, then the interest rate hikes will drop more than 50-basis points. If this happens then this will act in favor of the crypto market attracting more investors.
Though FED had made an announcement of a rate hike in March, the move did not result in much of a drop as the market was already in control of bears.
How Is the 2017 FOMC Similar To That Of Now?
In September 2017, there was a similar announcement made during which Bitcoin fell drastically after FED’s quantitative tightening measure announcement. However, there was a strong bullish rally later.
Hence, things look similar this time, in consideration of the fact that Bitcoin and Ethereum are already in a bearish cycle for a month. However, if Bitcoin is forced towards the upper end, there will still be a risk of bearish pull and this will result in investors’ emotions triggering a low-volume range.