The global crypto market has now sailed back to the anxiety and curiosity of the FED’s FOMC meet. The amendments of which would go public this coming Wednesday. Whilst novices in the business continue to fret concerns about the implications of the hike. Older hands bother little about the meet, owing to its implications on the higher timeframe.
The market capitalization of the crypto industry is presently hovering around $1.76 T, which is up 2.24% over the day. Conversely, as FED is expected to raise the rates by a “50-basis points”. Economic analysts, citizens, and investors have been voicing a neutral hike to around 2.5%.
The Impacts Of FOMC Meet On Cryptocurrencies!
In the FOMC meeting in March, we have seen FED concluding the meeting. By raising the federal funds rate target by 25 basis points. Which was the first FED rate hike since 2018. The market is presently in a similar sentimental environment, as it was in the month of March.
An analyst believes this event has the potential to change the course of risk markets from bearish to bullish. Or to cause a capitulation event in risk, depending on the outcome. He believes a 50 BPS hike has been anticipated for weeks now. And the market has priced itself accordingly, which has left the risks skewed to the upside.
Conversely, the weakness in U.S GDP reduces the probability that we hear, of the FED being merciless. That said if the FED comes off as being more cooperative, with future hikes and balance sheet reduction. We can expect an intense rally in risk and a macro-bottom for the crypto assets could be likely.
What If The Quantitative Tightening Is Implemented?
If the FED announces “Quantitative Tightening”, there will be less money for investors and traders to risk on. That said if the business regards the possible aggressive amendments in the meet. We could see capitulation bring down the BTC price to $28,000 levels. The results of which will reflect on altcoins.
The U.S equities, crypto, and the USD are all at an inflection point and could show colors after the conference. Successively, it is widely known that the crypto industry has been highly correlated with the U.S tech index. The graph below shows the projection of NASDAQ, following the FED’s Quantitative Tightening on the 20th of September 2017.
Summing up, the fact that the hike in rates will have implications on the broader crypto industry, cannot be ruled out. However, the impacts will be negligible to none, when seen from a long-term perspective. That said, the pullbacks do open up opportunities to place some buy orders.