Bitcoin and altcoins just concluded a bearish month in April and are currently waiting on the next catalyst. Although the markets are due for some bullish correction, investors remain cautious especially with the upcoming Federal Open Market Committee (FOMC) conference.
Bitcoin and most of the top altcoins have been experiencing significant sideways action in the last two days. This is due to the uncertainty ahead of the FOMC meeting which will likely have a significant impact on the cryptocurrency market. Federal Reserve chairman Jerome Powell will announce whether or not there will be quantitative tightening in the form of higher rates.
Several analysts have been putting forward their opinions. One such crypto analyst stated,
/1 What I think about this week’s FOMC statement and press conference (Wednesday 18:00 + 18:30 UTC)
This event has the potential to change the course of risk markets (#BTC etc.) from bear to bull, or to cause a capitulation event in risk… depending on the outcome
— tedtalksmacro (@tedtalksmacro) May 2, 2022
The announcement will provide clarity on upcoming monetary policy measures. The outcome will ultimately depend on the type of growth that the U.S economy has delivered so far in Q2. The FED’s previous announcement in March revealed that the economy shrunk by 1.4% in Q1, raising fears of a recession.
Any economic measures in response to negative economic growth are aimed at curbing recession risks. A hawkish or aggressive take by the FED would likely usher in more interest rate hikes. Such an outcome would likely trigger more downside for the crypto market, which would likely result in BTC dropping to its low $30K mark.
On the other hand, a dovish or soft take by the FED means rate hikes lower than 50-basis points. This would be good for the crypto market and would likely trigger more investor confidence, hence cryptocurrencies would enjoy some upside.
Is the FOMC announcement already been priced in?
The FED previously…
