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Wednesday’s FOMC meeting could decide whether the crypto rally continues or whether an end to the uptrend gets confirmed.
It’s the FOMC meeting again, where the Fed Chairman announces whether the interest rate will rise, stay put, or fall, and the market hangs on his every word as though he were a sage of ancient times.
How Jerome Powell can still retain respect after getting inflation completely wrong when it first took off, and then making the most violent and abrupt interest rate rises in history, is a question that could rightly be asked.
Be that as it may, the market does have to pay heed because this man and his agency are still playing the role of God for the markets. Yet another 25 basis point interest rate is firmly on the cards for tomorrow, although given the dire straits of some of the banks, this raise is still not cast in stone.
A future pause is likely
However, according to Angelo Kourkafas, CFA, investment strategist at Edward Jones, who spoke to the IBTimes, the 25 basis points are likely, but he believes that the Fed will probably pause thereafter.
"The statement may leave the door open for more tightening, but the May hike will likely be the last. The stress in regional banks, the recent drop in two-year Treasury yields below the fed funds rate and the inverted yield curve are all signs that policy is turning overly restrictive."
So where does this leave Bitcoin and the crypto market?
Bad news for crypto?
Ratcheting up interest rates yet another 0.25% cannot be good for crypto overall. On top of this latest rise, Bitcoin is still battling with heavy resistance at $30,000. It has been rejected several times now and does appear weaker.
Nevertheless, the price is still holding strong at around $27,000 to $28,000, and it would be just like the market to send Bitcoin crashing through the resistance when everyone expects the price to start retracing.
All the same, it does look as though Bitcoin will move lower, even if it is only to the strong support at $25,000. Do expect altcoins to get a real battering though if this is the case.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.